Sri Lanka Economic Monthly - August 2025 – Biding Time
This is Frontier’s monthly flagship report covering in detail Sri Lanka’s macroeconomic situation and our key forecasts. The August edition talks about Sri Lanka’s positive macroeconomic story and our views for the 2025-2026 period.
The report is structured with an Executive Summary that highlights key takeaways and provides our views on the exchange rate and interest rates. The detailed section then outlines our overall economic narrative for Sri Lanka, considering the latest data and developments. The August story focuses on how certain tariff-related uncertainties have eased and how the government’s fiscal performance is improving market liquidity, fueling a cycle of increased private sector credit. This, in turn, boosts economic activity and helps sustain the momentum of this cycle.
For our focus for August, we look at what is happening with Sri Lanka’s foreign reserves, and the key factors that have kept reserves flat across the year.
In our report we finally tie all of this into our exchange rate and interest rate views for 2025 and 2026, which are available as scenarios and best guess narrow ranges on an end-year and quarterly basis. For those wondering about how to make use of all this information in the context of global uncertainty, we provide an updated risk and opportunities map, alongside the key action points we think are relevant to specific client types.
For those interested in the key data points on Sri Lanka’s macroeconomic developments, the final section provides the latest on the trade balance, current account balance, reserves, exchange rate, interest rates, and inflation – including our forecast on CCPI inflation up to mid-2026.
Our clients would have received the report to their emails and is accessible on our Athena reports platform since 29th August. If you still haven’t had a chance to read through click here! If not, please get in touch with us for a trial subscription to our reports (clientconnect@frontiergroup.info).