Short-term confidence holds, medium-term outlook softens: CBSL Systemic Risk Survey

MARKET participants’ confidence in Sri Lanka’s financial system remained positive over the next 12 months, but declined over the medium term, according to the Central Bank of Sri Lanka’s (CBSL) latest Systemic Risk Survey for the first half of 2026.

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The survey was conducted prior to the US Supreme Court’s decision on the Trump administration’s tariff policy and its aftermath. The survey results were released just as the US and Israel launched strikes on Iran which plunged the global economy into uncertainty with oil prices spiking and major airline hubs in the GCC region shutting down.

The survey, conducted between 19 December 2025 and 16 January 2026 with the participation of 147 firms, indicated that short-term confidence (over the next one year) remained positive, while medium-term confidence (over the next three years) declined, possibly shaped by uncertainties related to natural hazards and geopolitical tensions that prevailed during the survey period.