Population of 23m, with a diaspora of between 2m and 3m.
Anura Kumara Dissanayake (known as AKD) was elected president in 2024, and his National People's Power (NPP) coalition won a huge parliamentary majority in November 2024. The NPP is dominated by the Janatha Vimukthi Peramuna party (JVP), which led two armed insurgencies in the 1970s and 1980s. The government is widely praised as marking a clear break from the cronyism and nepotism it supplanted and has pursued corruption allegations against its predecessors, including Ranil Wickremesinghe, the former president, who was arrested on August 22nd 2025.
The opposition is divided and discredited, consisting of three main parties, one led by Wickremesinghe and two by the sons of other former presidents. Namal Rajapaksa, son and nephew of two former presidents blamed for the policy blunders that led to the 2022 debacle, believes an opposition coalition will be needed to gain power in future.
Sri Lanka suffered a severe economic collapse around 2022—rampant inflation, fuel shortages, mass poverty and foreign-debt default—accompanied by mass civil unrest. Since then the country has staged a remarkable recovery. Thanks to an IMF programme negotiated in 2023, swingeing austerity measures, debt-rescheduling and the global post-covid recovery, inflation has been reined in, with prices largely stable year-on-year. Tax revenue as a share of GDP has climbed from a low of 7.3% in 2022 to an estimated 13.9% in 2025. The economy grew by 5% in 2024, but the growth forecast for 2025 and the following two years is a measly 3-4%. GDP per person has only just caught up with its level in 2018.
A World Bank report in April 2025 found that the poverty rate, with the line set at $3.65 per person per day, is at 24.5%, nearly double what it was in 2019. Malnutrition among children under five increased from 12.2% in 2021 to 17% in 2024; household incomes remain well below pre-crisis levels. In 2028 principal payments on Sri Lanka's debt step up sharply. Using the government's own dynamic local-currency threshold (equivalent to $1.71 a day), the poverty rate has doubled since 2019 to 30%; after Cyclone Ditwah it is likely to rise further. Real incomes have stagnated. The public sector employs one in five workers.
The composition of Sri Lanka's exports has not changed much for decades: dominated by tea, rubber and, above all, apparel, which accounted for 38% of goods exports in 2024, with some 40% of that going to America. Around two-thirds of garment-factory workers are women. The industry has pulled millions of women into the workforce since the 1980s.
Overseas workers' remittances reached nearly $700m in July 2025, contributing to a current-account surplus. These workers are still mainly domestic servants and construction workers in the Middle East, but a growing proportion of remittances comes from the earnings of higher-paid professionals. Many have left for good.
The government is investing heavily in tourism. Arrivals rose from 1.5m in 2023 to 2m in 2024, and the government hopes for 3m in 2025. The City of Dreams development, opened in downtown Colombo in August 2025 with the stated ambition of making Sri Lanka "India's Macau", houses a casino, luxury hotels, high-end shops and a floating champagne-and-cocktail bar.
In response to the closure of the Strait of Hormuz, Sri Lanka limited fuel purchases to 15 litres per day and instituted a four-day working week, declaring all Wednesdays holidays.
Sri Lanka drew a tariff rate of 20% under Donald Trump's tariff regime—the same as Bangladesh, only a smidgen above the 19% applied to South-East Asian rivals such as Indonesia and Thailand, and far below the punitive 50% India faces. Companies have been citing the proposed tariffs to refuse to pay salary rises or bonuses. Wickremesinghe warned that the tariffs could put over 100,000 jobs at risk.
American brands such as Gap and Walmart have asked manufacturers to absorb at least half of the initial 10% tariff imposed during the pause. The Sri Lankan government says it is scheduled for another round of trade talks with America.
In late 2025 three simultaneous cyclones and an unusually intense monsoon left a trail of destruction across southern Asia. Sri Lanka was particularly hard hit, with infrastructure and agriculture severely damaged. Across the affected region—Sri Lanka, Indonesia, Vietnam and Thailand—at least 1,600 people perished, nearly 11m were affected and over a million displaced. Sri Lanka was still recovering from the 2022 economic collapse.
Cyclone Ditwah in November 2025 was Sri Lanka's worst natural disaster since the 2004 tsunami, and the first big test of Dissanayake's government. The storm ravaged the island for three days, hitting hardest in the poor central uplands, where some towns saw a fifth of their usual annual rainfall in a single day. The rains unleashed more than a thousand landslides. The death toll surpassed 800, including those missing and presumed dead—much lower than the 30,000 who died in 2004, but asset losses were probably on a similar scale, owing to extensive damage to bridges and power stations. The latest assessment puts the hit at $3.5bn, or 3.5% of GDP.
The government botched the immediate response—some towns received no warning despite officials knowing what was coming—but the recovery went better. Traditional donors such as America and Europe have little presence in Sri Lanka; aid flows have fallen sharply. The United Arab Emirates provided manpower and rescue vehicles. Above all there was India, which deployed helicopters from an aircraft carrier docked in Colombo, rebuilt dozens of bridges with prefabricated kits, and in December pledged $100m in aid and $350m in concessional loans—by far the most generous package. China was notable by its absence. Tourism was barely dented.
Sri Lanka endured a bloody 26-year civil war from 1983 to 2009, fought over the failed bid by the Liberation Tigers of Tamil Eelam (LTTE) to secure an independent homeland for the Tamil (largely Hindu) minority in the north and east. A UN panel of experts estimated as many as 40,000 civilians were killed. Tens of thousands of people disappeared during the conflict. Bitterness over the war and the massacre of civilians that accompanied the government's victory impedes the willingness of the diaspora to return or invest.
In the late 1980s, a separate armed insurrection was waged by the Janatha Vimukthi Peramuna (JVP) in the name of the majority Sinhalese-Buddhist population and Marxism-Leninism.
A report by the Colombo-based International Centre for Ethnic Studies in 2023 identified at least 26 mass graves, predominantly in the north and east. Many date from the civil war; some from the JVP insurrection in the late 1980s. Sri Lanka still has no national policy covering the exhumation of mass graves that ensures affected families are properly represented or that requires forensic analysis to international standards.
At Chemmani, a lagoon-side village in the Jaffna peninsula, evidence of mass graves first emerged in the late 1990s. In 1998, after the army recaptured the peninsula from the Tigers, a soldier named Somaratne Rajapakse was sentenced to death for the abduction, rape and murder of an 18-year-old; he alleged that the graves held 300-400 bodies of Tamil civilians dumped by the security forces. Fifteen skeletal remains were exhumed and excavations then halted for a quarter of a century. In February 2025, after local-government workers clearing land stumbled upon human bones, the Jaffna magistrate ordered a new dig; by September 2025 some 240 skeletons had been unearthed, including those of babies. Even Jaffna's main cricket ground, the Duraiappa stadium, stands on the site of a mass grave discovered during renovations in 1999.
Whoever has lived long enough to find out what life is, knows how deep a debt of gratitude we owe to Adam, the first great benefactor of our race. He brought death into the world.