By Uddeepa Peiris
The Colombo Stock Exchange's All Share Price Index (ASPI) has reached an unprecedented milestone, surpassing the 17,000-point mark for the first time in history. This remarkable ascent reflects growing investor confidence in Sri Lanka's economic trajectory, underpinned by recent governmental policies, good governance initiatives, and strategic international partnerships.
Economic Recovery and Growth
Sri Lanka's economy has demonstrated a robust recovery from the severe foreign exchange crisis of 2022. The nation achieved a 5% GDP growth in 2024, marking the highest in seven years. This resurgence is attributed to comprehensive debt restructuring and a $2.9 billion program secured from the International Monetary Fund (IMF) in March 2023.
The Central Bank of Sri Lanka has also introduced progressive monetary policies, including a single policy rate of 8% to stimulate private sector credit growth. Inflation is projected to stabilize at 5% by mid-2025, offering further confidence in the country's financial stability.
Strategic Foreign Investments
A significant driver of the stock market’s bullish trend is the government’s proactive approach to foreign investments. The agreement with China’s Sinopec to fast-track a $3.7 billion oil refinery project in Hambantota highlights the strategic focus on infrastructure and energy diversification. Such initiatives aim to reduce reliance on imports while creating jobs and generating foreign exchange.
Further, partnerships with India and Japan to develop the Colombo Port City into a global financial hub emphasize Sri Lanka’s ambition to position itself as a key player in regional commerce and trade.
Good Governance as a Pillar of Progress
The current administration has made good governance a cornerstone of its policy agenda. President Anura Kumara Dissanayake’s government has focused on increasing transparency, accountability, and anti-corruption measures to restore public and investor trust.
Key initiatives include:
- Establishing an independent anti-corruption commission with wide-reaching powers.
- Strengthening the judiciary to ensure rule of law.
- Introducing e-governance platforms to enhance efficiency and minimize bureaucratic red tape.
These reforms not only ensure a fair and competitive business environment but also enhance Sri Lanka’s appeal as a destination for sustainable foreign direct investment.
Visionary Policies for Inclusive Growth
The government’s "Vision 2025" plan aims to drive inclusive growth by focusing on:
- Labor law reforms to increase employment opportunities.
- Expanding social safety nets for vulnerable populations.
- Promoting technological innovation and digital transformation.
By aligning these reforms with international standards, Sri Lanka is positioning itself as a resilient and adaptable economy prepared for global challenges.
Future Outlook
The historic surge in the ASPI is more than just a financial milestone; it is a reflection of the optimism surrounding Sri Lanka’s economic and governance reforms. However, sustaining this momentum requires:
- Continued fiscal discipline.
- Successful implementation of structural reforms.
- Strengthening public institutions to maintain trust and stability.
Good governance, combined with robust economic policies and international cooperation, will be critical as Sri Lanka charts its path toward long-term prosperity.

Uddeepa Peiris is a seasoned Asset Management Professional with over twelve years of experience in investment management, portfolio management, and risk analysis. Now based in France, he remains actively involved in the financial sector, specializing in strategic planning and trade finance.