📈 Lynear Wealth: Sri Lanka’s Macro Outlook Resilient Post-IMF

Sri Lanka is entering a "materially stronger" macroeconomic phase, reducing risks as external debt servicing resumes. Lynear Wealth MD Naveen Gunawardane projects that sustained fiscal and external surpluses will mitigate vulnerabilities through 2026 and beyond. • Macroeconomic Projections (2026) • Primary Surplus: Expected at ~1.0% of GDP (vs. IMF target of 2.3%). • Currency: Depreciation likely to remain limited, below 3%. • Interest Rates: Projected to stay relatively stable. • Current Account: Expected to remain in surplus despite the removal of import restrictions. • Key Economic Drivers • Workers' Remittances: Estimated at US$ 7.8-7.9 Bn for 2025; remains a primary stabilizer for the external sector. • Vehicle Imports: Rebounded to US$ 1.3 Bn in 2025; expected to ease in 2026, supporting currency stability. • Fiscal Buffer: Treasury maintained a Rs. 1.1 Tn cash buffer, a significant shift from previous deficit cycles. • Debt Servicing Outlook • Average Servicing: Annual external debt payments to average US$ 2.75 Bn through 2027. • Post-IMF (2028+): Servicing expected to rise to US$ 3.5-4 Bn annually. • Risk Assessment: Post-IMF transition is deemed manageable provided the twin surpluses (primary and current account) are maintained. _Summary based on 2026 HNBIB Investor Forum data._