The ongoing and planned trade reforms, including the gradual removal of para-tariffs, could improve competitiveness and increase household consumption by around 3.1%, with stronger gains for lower-income households, the World Bank\u2019s April 2026 South Asia Economic Update release on Friday(8) said.<\/p>\n\n\n\n
The planned import duty cuts would be steepest among the emerging export industries of food and beverage manufacturing, as well as rubber and plastic products. In line with the new National Tariff Policy, the Government is planning a four-year reform to fully eliminate its PAL and CESS para-tariffs by 2029. This phase-out of Sri Lanka\u2019s two largest paratariffs would represent a 9-percentage-point cut.<\/p>\n\n\n\n
The report also cautioned about continued use of para-tariffs, particularly, the Ports and Airport Development Levy and the commodity export subsidy scheme. The report notes relatively high import duties and trade barriers are negatively impacting Sri Lanka\u2019s progress. The external sector risks are also significant.<\/p>\n\n\n\n
The report also highlighted that Sri Lanka is highly exposed to global energy price shocks, which can increase import bills and place pressure on inflation, fiscal balances, and the current account deficit. The report also warns that volatility in global energy markets, especially linked to Middle East tensions, could further strain Sri Lanka\u2019s macroeconomic stability. In addition, climate-related shocks remain a major threat. The report says events such as Cyclone Ditwa underline the country\u2019s vulnerability to extreme weather, which can disrupt agriculture, damage infrastructure, and slow down overall economic activity.<\/p>\n\n\n\n
The report highlights high risks from external factors, including potential Middle East disruptions affecting remittances and tourism, as well as rising global energy prices. The economy continues to struggle with the \u201cscarring effects\u201d of the previous crisis, including shortages of skilled labor due to outward migration and under-execution of the capital budget.<\/p>\n\n\n\n
While the government has improved its primary surplus in 2025, the country faces continued pressure to manage debt and implement State-Owned Enterprise (SOE) reforms. Proposed trade reforms, such as phasing out para-tariffs, are expected to support trade. The report emphasizes that while recovery is underway, sustained growth depends on structural reforms and mitigating the impact of higher import bills on the current account deficit.<\/p>\n\n\n\n
<\/p>\n\n\n\n
Source: Daily News<\/p>\n","protected":false},"excerpt":{"rendered":"
The ongoing and planned trade reforms, including the gradual removal of para-tariffs, could improve competitiveness and increase household consumption by around 3.1%, with stronger gains for lower-income households, the World Bank\u2019s April 2026 South Asia Economic Update release on Friday(8) […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-16339","post","type-post","status-publish","format-standard","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/enterprisenews.lk\/index.php?rest_route=\/wp\/v2\/posts\/16339","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/enterprisenews.lk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterprisenews.lk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterprisenews.lk\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/enterprisenews.lk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16339"}],"version-history":[{"count":1,"href":"https:\/\/enterprisenews.lk\/index.php?rest_route=\/wp\/v2\/posts\/16339\/revisions"}],"predecessor-version":[{"id":16340,"href":"https:\/\/enterprisenews.lk\/index.php?rest_route=\/wp\/v2\/posts\/16339\/revisions\/16340"}],"wp:attachment":[{"href":"https:\/\/enterprisenews.lk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16339"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterprisenews.lk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16339"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterprisenews.lk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16339"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}