SenFin Research – News Updates – 2 September 2026

Inflation overshoots CB band despite easing fuel prices
Sri Lanka’s Colombo inflation accelerated to 8.0 percent in August, moving above the Central Bank’s upper tolerance margin, as the food prices rose sharply and the transport costs remained the largest source of the annual price pressure. Source: (Daily Mirror) https://www.dailymirror.lk/business-news/Inflation-overshoots-CB-band-despite-easing-fuel-prices/273-349204

SL to miss IMF reserve ratio, approximation urged
Sri Lanka may not be able to reach a Adequacy of Reserves Assessment ratio of 100% by end-2026 – which assesses the country's ability to repay debt – but it should try to approximate the target set by the International Monetary Fund at the signing of the Extended Fund Facility, despite its less than favorable sovereign credit rating, Committee on Public Finance Chairperson Harsha de Silva said on Saturday (29), speaking to media. Source: (the morning) https://www.themorning.lk/articles/N9OR8t6PUlu6WcrqyyJk

External sector: Trade deficit widens to $ 6.5 b
Sri Lanka’s external current account recorded a deficit of $ 142 million (m) in July 2026, marking the fourth consecutive month in negative territory as the nation navigates severe headwinds from geopolitical developments in the Middle East. According to the latest data, the cumulative external current account recorded a deficit of $ 387 m during the first seven months of 2026 (January-July). Source: (the morning) https://www.themorning.lk/articles/FwZl5UOs2By9oRnrwUsZ

Public debt tops Rs. 32.98 t in 2Q despite fall in dollar terms
Sri Lanka’s gross public debt increased by Rs. 744 billion during the second quarter of 2026 to Rs. 32.98 trillion, even as its dollar value declined by $ 4.32 billion to $ 97.95 billion, according to the latest Public Debt Management Office (PDMO) data. Source: (Daily Ft) https://www.ft.lk/front-page/Public-debt-tops-Rs-32-98-t-in-2Q-despite-fall-in-dollar-terms/44-796664

Apparel, tea declines pull Sri Lanka’s July merchandise exports lower
The lower earnings from the apparel, tea, seafood and coconut-based products outweighed the strong growth in electronics and spices, pulling the merchandise exports down 1.3 percent year-on-year (YoY) to US $ 1.29 billion in July. Source: (Daily Mirror) https://www.dailymirror.lk/business-main/Apparel-tea-declines-pull-Sri-Lankas-July-merchandise-exports-lower/245-349205

PUCSL hits back on BESS delay
The Public Utilities Commission of Sri Lanka (PUCSL) yesterday (31 August) said it had already issued all necessary guidelines and sample documents required for the implementation of the battery energy storage system (BESS) capacity to the National System Operator (Private) Limited (NSO), well in advance of the tariff decision requiring such implementation. Source: (the morning) https://www.themorning.lk/articles/hg6b5vfBAVp0K2WVMash

Construction PMI extends expansion in July
The Sri Lanka Purchasing Managers’ Index for Construction (PMI – Construction), as reflected by the Total Activity Index, increased to 61.4 in July 2026, indicating continued expansion in construction activities. Many survey respondents highlighted the sustained flow of construction work despite input constraints, particularly the short supply of bitumen. Source: (the morning) https://www.themorning.lk/articles/g0P2vhqv024B2oDD3CLx

August tourist arrivals fall 3.3% despite boost from Esala Perahera
Sri Lanka’s tourism recovery continued to lose momentum in August, with international arrivals declining 3.29% year-on-year (YoY) to 191,704, leaving the country about 31,400 visitors behind last year’s pace after the first eight months. Source: (Daily Ft) https://www.ft.lk/front-page/August-tourist-arrivals-fall-3-3-despite-boost-from-Esala-Perahera/44-796658

China expected to shift BRI strategy after Sri Lanka
Due to the international backlash that China had faced with its strategic statecraft investments in Sri Lanka more than a decade ago, there has been growing consus among its intelligentsia that the Government should focus on smaller investments, less involvement of its State-owned enterprises, and greater consideration for the industrial capacity of the host societies of Belt and Road Initiative (BRI) investments, Institute of South Asian Studies National University of Singapore Research Fellow Ivan Lidarev said recently. Source: (the morning) https://www.themorning.lk/articles/UgLP9jASSJwFox4WXN0N

Vulnerabilities within AI services surged tenfold in 1H 2026: Report
The growing adoption of AI is happening across multiple sectors and has also led to an increase in the number of vulnerabilities discovered within AI services, Kaspersky’s Quarterly Exploits and Vulnerabilities Report showed. Source: (economynext) https://economynext.com/vulnerabilities-within-ai-services-surged-tenfold-in-1h-2026-report-282272/

AI could cause global economic downturn, Andrew Bailey warns G20
The governor of the Bank of England has warned G20 finance ministers that artificial intelligence could cause a global economic downturn and pose a significant cyber security risk to financial systems. Source: (BBC) https://www.bbc.com/news/articles/c99dym3prl1o#google_vignette

Foreign investors buy over US$24mn worth of Sri Lanka rupee bonds
Foreign investors bought a net 8,059 million rupees (US$24.8 million) worth of Sri Lanka rupee bonds in the week ended on August 28, Central Bank data showed, amid a firmer rupee currency. Source: (economynext) https://economynext.com/foreign-investors-buy-over-us24mn-worth-of-sri-lanka-rupee-bonds-282503/

Sri Lanka rupee closes at 328.00/10 to US dollar spot, bond yields steady
Sri Lanka’s rupee closed at 328.00/10 to the US dollar in the spot market on Tuesday, improving from 328.10/30 the previous day, while bond yields closed broadly steady, dealers said. Source: (economynext) https://economynext.com/sri-lanka-rupee-closes-at-328-00-10-to-us-dollar-spot-bond-yields-steady-282496/

Sri Lanka stocks close marginally down; ASPI dips 0.08-pct
Sri Lanka’s Colombo Stock Exchange closed down on Tuesday trading, CSE data showed, with the benchmark All Share Price Index moving down 0.08 percent. Source: (economynext) https://economynext.com/sri-lanka-stocks-close-marginally-down-aspi-dips-0-08-pct-282472/

Hayleys Fentons delivers new manufacturing facility for Shield Restraint Systems on schedule
The project arm of Hayleys Fentons Ltd., has successfully completed construction of a state-of-the-art manufacturing facility for Shield Restraint Systems Ltd., at the Wathupitiwala Export Processing Zone, delivered fully on schedule, from foundation stone to completion in roughly 14 months. Source: (Daily Ft) https://www.ft.lk/business/Hayleys-Fentons-delivers-new-manufacturing-facility-for-Shield-Restraint-Systems-on-schedule/34-796672

Union Bank plans Rs. 708.4 m Rights Issue to bolster Tier 1 capital
Union Bank of Colombo PLC has proposed a Rs. 708.4 million Rights Issue to strengthen its Tier 1 capital adequacy and support expansion of its loan book. Source: (Daily Ft) https://www.ft.lk/front-page/Union-Bank-plans-Rs-708-4-m-Rights-Issue-to-bolster-Tier-1-capital/44-796656

Janashakthi Life delivers 36% revenue growth, outperforming the industry
Janashakthi Life, the flagship company of JXG (Janashakthi Group), delivered a strong first-half performance in 2026, with Gross Written Premiums (GWP) increasing by 36% year-on-year to Rs. 5.11billion. The Company’s growth significantly outpaced the industry’s 20.8% growth during the period, reflecting continued demand for its life insurance solutions and progress in expanding its customer base and strengthening its market presence. Source: (Daily News) https://dailynews.lk/2026/09/02/business/1036650/janashakthi-life-delivers-36-revenue-growth-outperforming-the-industry/