US advises its investors to navigate Sri Lanka with caution

NOTES THAT INTERNATIONAL SUPPORT HAD HELPED RESTORE MACROECONOMIC BALANCE, BUT REFORMS NEEDED TO ENSURE LONG-TERM INVESTOR CONFIDENCE HIGHLIGHTS OPENINGS IN ICT, TOURISM, RENEWABLE ENERGY, AVIATION AND DEFENSE POINTS OUT REGULATORY OPACITY, LAND OWNERSHIP RESTRICTIONS, AND BUREAUCRATIC INEFFICIENCIES CONTINUE TO HAMPER INVESTMENT

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The United States cautioned its investors to tread carefully in Sri Lanka, saying that while the island nation has returned to economic stability and is opening opportunities across several sectors, persistent policy unpredictability, opaque regulations and structural weaknesses continue to cloud the investment climate.

In its 2025 Investment Climate Statement on Sri Lanka released in September, the US State Department said the economy “has stabilised under an IMF programme, supported by NPP-led political stability, an increase in foreign reserves, a positive GDP growth rate, and falling inflation.”