Sri Lanka’s economic growth has slowed sharply while inflation, youth unemployment and poverty continue to put pressure on the public, former Foreign Minister Prof. G.L. Peiris said yesterday.
Addressing a media briefing, organised by the People’s United Opposition, in Colombo, Prof Peiris said economic growth had declined from 5.8% in the second quarter of 2025 to 4.2% in the second quarter of 2026.
He also claimed that the economy was now about 2% below the level recorded in 2008.
Prof. Peiris said inflation had risen from 6.3%, in June, to 8% by August, while food inflation had reached 8.5%. He warned that continued inflation would erode people’s savings and the value of their assets.
He said the value of the US dollar had risen from Rs. 293, in October 2024, to Rs. 337, increasing import costs and placing additional pressure on the repayment of foreign debt.
Prof Peiris said the economic contraction, inflation and foreign exchange difficulties had hampered job creation, while unemployment among educated youth had risen to 43%, which, he described, as the highest youth unemployment rate in Asia.
He also said that Sri Lanka had attracted no large-scale foreign investment over the past two years, citing what he said were concerns raised in a US State Department report over weak institutional coordination, frequently changing policies and tax policies.
Prof Peiris further criticised the Government over the pace of expenditure, claiming that only 28% of funds allocated in last year’s Budget had been spent by September.
He said only about 8% of the Rs. 500 billion allocated for people affected by the Ditwah disaster had been spent, arguing that institutional inefficiency, rather than a shortage of funds, was responsible.
Peiris also questioned the economic impact of the Government’s vehicle import policy, claiming that the reopening of vehicle imports had resulted in a significant outflow of foreign exchange.
He said Customs revenue from vehicle imports, which he put at Rs. 255.1 billion in 2025, had declined to about Rs. 200 billion by September this year and was likely to fall further.
Against this backdrop, Prof Peiris said the Government should use the Budget, scheduled to be presented on November 12, to introduce practical measures to address the country’s economic problems.
Former Ministers Dr Rajitha Senaratne, Patali Champila Ranawaka and Suren Raghavan also addressed the press
Source : The Island
