📈 Sri Lanka’s Private Sector Faces Paradigm Shift Amid Governance & Consumer Dynamics

• Economic Shift: Frontier Research highlights a fundamental structural transition from state-propped demand and currency depreciation to private sector-led growth. Capital and skilled workforce are expected to shift from weaker to stronger firms without government bailouts. • Consumer Behavior: According to a BCG & Ceylon Chamber of Commerce study, brand loyalty in consumer staples dropped significantly, with only 6% of buyers staying with a single brand compared to 14% in 2020. • Corporate Governance & Oversight: CBSL Governor and CoPF reported a Rs. 13.6 Bn fraud at NDB that went undetected by internal controls and external auditors. Receivables on CEFT quadrupled within a year to over Rs. 12 Bn in 2025. CBSL confirmed no deposits were compromised, while regulatory reviews remain ongoing. • Market Realities: Reduced tariff protections and absence of active capital market discipline mean corporate boards must proactively enforce internal governance, robust oversight, and decision-making quality to remain viable.