Sri Lanka's Economic & Governance Update: Post-2024 Political Landscape 📉

• Political & Mandate Shift • Parliamentary Support: NPP won 159 of 225 seats (61.56% of valid votes; 6.86M votes) in Nov 2024. • Local Elections Trend: Local election support stood at 43.26% (4.50M votes) in May 2025. • Public Sentiment: Verité Research (July 2026) shows NPP Govt approval at 50% (down from 65% in Feb 2026). Citizens rating economic conditions as "improving" dropped to 42% (from 64%). •📈 Anti-Establishment Politics: US Midterm Lessons for Sri Lanka's NPP • Macro Performance vs. Household Reality: • World Bank projects Sri Lanka's real GDP growth at 4.4% for 2026 (following 4.7% in 1H 2026), marking a return to pre-crisis economic output levels. • Despite macroeconomic stabilization, poverty remains elevated at 16.9% (2025 estimate), creating a "recovery-legitimacy gap" as slow real income growth and inflation pressure household budgets. • Public sentiment reflects this disconnect: Government approval fell to 50% in July 2026 (down from 65% in Feb 2026), while positive economic sentiment dropped from 64% to 42% (Verité Research). • Electoral Mandate Trends: • The NPP secured a sweeping 2-3rd parliamentary majority (159 of 225 seats, 61.56% vote share) in Nov 2024. • Subsequent May 2025 local elections showed shifted voting dynamics, with NPP capturing 43.26% of valid votes (4.50 Mn votes). • Key Reform & Institutional Initiatives: • Legislative Progress: Key anti-corruption and governance measures enacted include the Proceeds of Crime Act, amendments to the National Audit Act, and the repeal of statutory benefits for former presidents. • Constitutional Updates: Parliament passed the 22nd Amendment in Sept 2026 (158-63 votes), raising Supreme Court and Court of Appeal judicial retirement ages and expanding appellate bench size. • Security Framework: Proposed Protection of the State from Terrorism Bill (gazetted Sept 2026) aims to replace the PTA, though executive detention provisions face civil society review.