📈 Sri Lanka Signals Strong Recovery & Growth to Investors

• Macro & Monetary Outlook: Inflation hit 7.3% in July due to energy price adjustments, but is projected to normalize toward the 5% target by early next year if oil remains near $80/barrel. A 100 bps rate hike in May and import surcharges stabilized the LKR, enabling gradual currency appreciation. • Economic Growth Trajectory: Real GDP grew around 5% over three consecutive years post-crisis. A moderate slowdown to 4–5% is expected in H2 2026, with medium-term growth projected to return to a baseline ~5% pace. • IMF Program & Policy Reforms: The IMF's EFF 4th and 5th reviews were completed in Q1 2026. The next review is slated for Nov/Dec, with full program completion projected by H2 2027. • Capital Market Highlights: Speaking at investment forums in Sydney and Melbourne, officials highlighted Australia as a top-10 foreign capital source. Sri Lanka’s ASPI surged 360% since May 2020, offering a Asia-low P/E ratio of 11.20x to attract diaspora and institutional capital.