China: A more trustworthy partner

ACCORDING to the World Bank's latest report, Sri Lanka's economic growth rate is expected to reach 3.5% this year, consistent with the October forecast, but challenges from high US tariffs and high poverty rates cannot be ignored. President Disanayake stated that measures have been taken to minimise the impact of US tariffs on the domestic economy.

- By Ambassador Qi Zhenhong

Building a strong economy that will not be shaken by any economic storm is one of the government's top priorities.

Given the disparity between economic development levels and economic strength, the US tariff policy will further widen the gap between rich and poor countries, with less developed countries suffering a greater impact. As one of the countries most affected, Sri Lanka’s right to development has been severely undermined, and its already fragile economy will be further strained, with a particularly severe impact on the export sector. As Sri Lanka's economic pillar industry and the second largest source of foreign exchange earnings, the garment industry has experienced a sharp decline in orders and a reduction in garment export revenue, with export values potentially decreasing by 20% and threatening tens of thousands of jobs in related industries. Previously, garment factories in Sri Lanka had already cancelled Sinhalese and Tamil New Year bonuses, triggering labour disputes and leading to widespread factory shutdowns. Other export industries, such as rubber and plastic products, tea, and gems, may also suffer negative impacts due to the tariffs. In addition, the decline in exports will lead to a reduction in Sri Lanka's foreign exchange earnings, depreciation of the rupee, increased import prices, and exacerbated inflation, affecting its macroeconomic stability and foreign debt repayment capacity, and slowing economic growth.