At the beginning of 2026, the overall situation appears more stable and structured, yet it remains vulnerable. The economy recovered noticeably in 2025, driven by tourism, exports, and fiscal discipline. Inflation and the budget deficit are under better control, and confidence among international partners has increased. However, the recovery is unevenly distributed: many households continue to suffer from the social consequences of austerity measures, and poverty as well as informal employment remain widespread.
In addition, the recovery process was slowed towards the end of 2025 by natural events such as flooding and storm damage, which particularly affected infrastructure and agriculture. Reconstruction efforts began in early 2026, but they continue to tie up public resources and intensify pressure for further reforms.
Politically, Sri Lanka is pursuing a clear course of stabilization in early 2026, focusing on fiscal discipline, structural reforms, and international integration. Nevertheless, key challenges remain unresolved, including debt restructuring, social cushioning of reforms, and the development of sustainable growth models.
Srilankapoint Projects 2026
Extension Project – Girls’ Home “Vijitha Balika”
A major flagship project within the extension of the home in Beruwala is the expansion of the existing new roof by approximately 30 %. This extension will allow the newly constructed showers and toilet facilities to be fully covered. In addition, sufficient protected space will be created to house all washing machines securely and shielded from weather conditions.
Toilets/showers at the “Vijitha Balika” girls' home
The implementation of this project required the use of heavy construction machinery, as existing building components had to be dismantled and the foundations completely redesigned. The structural intervention is therefore complex and places high demands on planning and execution.
Laundry room at the “Vijitha Balika” girls' home
This construction project ranks among the largest initiatives that Srilankapoint has undertaken to date. Its significance lies not only in the physical expansion, but above all in the sustainable improvement of hygienic infrastructure and operational processes at the home.
The financing is secured: the required donation funds have already been firmly pledged, providing a solid basis for successful implementation.
Photovoltaic System – Boys’ Home “Payagala Jayanthi”
As a second major project, we are planning to install a photovoltaic system with a small energy storage unit at the boys’ home “Payagala Jayanthi”. The aim is to enable this home as well to operate largely independently from the public electricity supply.
Refrigerators, fans, and lighting represent the largest electricity consumers and are intended to be reliably powered by the new system. Given the continuously rising electricity prices in Sri Lanka, such an investment is economically sound, with an estimated amortization period of approximately eight years.
The project is currently in the planning phase, with implementation scheduled between mid-February and mid-April. We are particularly pleased that donation funds for this project have already been pledged.
At the beginning of 2025, Sri Lanka was clearly in the phase of post-crisis recovery following the sovereign default of 2022. While initial signs of stabilization were evident - declining inflation, a recovering currency, and cautious economic growth - the social consequences of the crisis remained clearly perceptible. High living costs, limited purchasing power among broad segments of the population, and a fragile political climate continued to characterize the country. International support, particularly from the IMF, remained crucial in securing basic supplies and ensuring macroeconomic stability.
Against this backdrop, orphanages - receiving little to no state funding - continued to face significant challenges. At Srilankapoint, we were therefore compelled to refocus our support strongly on ensuring adequate nutrition in the homes. While this prioritization was necessary, it resulted in reduced funding for education and trauma support.
Srilankapoint Projects 2025
In 2025, together with additional donors, we successfully commissioned a photovoltaic system with a capacity of 6 kilowatts at the girls’ home “Vijitha Balika”. This investment enables the home to operate largely independently from the public electricity grid.
A particularly important feature of the system is its resilience during frequent power outages, which remain a common occurrence in Sri Lanka. Thanks to a supplementary small battery, the home can continue operating even when solar radiation is temporarily insufficient. Critical facilities such as freezers therefore remain reliably functional at all times.
This investment was both technically and economically highly compelling and of great significance for the home’s daily operations. It not only enhances energy security but also sustainably reduces ongoing energy costs over the long term.
As part of the installation of the new power system, the entire roof was also comprehensively renovated. This represented a substantial investment, but one that has clearly proven worthwhile.
Roof of the “Vijitha Balika” girls’ home before renovation
Roof of the “Vijitha Balika” girls’ home after renovation - Thank you, Catherine and Ernst
The acute shortages of fuel, food, and medicines were partially overcome in 2024. Inflation declined, and the national currency stabilized. However, this progress was heavily dependent on international support, particularly from the International Monetary Fund (IMF) and bilateral partners.
At the same time, the social situation remained strained. Austerity measures implemented as part of the reform programmes had a tangible impact on large segments of the population: rising living costs, declining real wages, and an increasing risk of poverty shaped the daily lives of many people. Politically, relative calm prevailed, yet public trust in state institutions remained fragile.
Srilankapoint Projects 2024
In addition to our ongoing support in the areas of food, clothing, and bedding, we decided in 2024 to place a targeted focus on infrastructure. At the boys’ home “Payagala Jayanthi” , the sanitary facilities were completely renovated, as they had previously been in a severely dilapidated condition, as documented in the corresponding photographs.
Thanks to the generous support of our donors, this investment could be realized. The showers and toilets are now once again hygienically sound and fully functional, contributing significantly to an improved quality of life for the residents.
Furthermore, all dormitories were equipped with new fans to noticeably improve the indoor climate. The walls were also freshly painted, restoring a bright, friendly, and welcoming atmosphere to the rooms. In addition, surrounding outdoor works were supported, further enhancing the overall appearance and usability of the facility.
This project was a deeply rewarding and meaningful endeavour for everyone involved. The home’s management expressed great gratitude for the support and for the sustainable improvement of the infrastructure.
July 2023
Sri Lanka is in an unprecedented economic crisis. 40% of the population now has barely enough to eat. International aid will not kick in until the country initiates reforms.
The country lacks foreign currency. Agricultural production declined after the abrupt ban on chemical fertilizers and the switch to purely organic production - mainly because of a lack of foreign currency. The consequences were food shortages and a dramatic increase in the cost of living.
Inflation has moderated somewhat compared to year-end 2022 at still high levels. While food inflation was still close to 90 percent at the end of the year, it is about 50 percent at mid-year. The population of about 22 million is barely able to pay for imports of food, fuel and medicine.
More and more people on the island do not have enough to eat
According to the UN World Food Programme, 2 in 5 Sri Lankan households barely have enough food to eat. In 2019, it was 1 in 10 households.
About 7 in 10 households regularly reduced the number of meals or reduced the serving size. 17 percent of children under five are malnourished.
Political situation remains unstable
The political future of the new president, Ranil Wickremesinghe, will likely depend on the success of the reforms. His predecessor Gotabaya Rajapaksa resigned in the summer after months of protests against the high cost of living and scarce resources in food and gasoline, and fled the country.
The fact that Wickremesinghe, of all people, succeeded him disappointed many protesters, who saw him primarily as a longtime companion of the ousted president and also held him jointly responsible for corruption and nepotism.
Wickremesinghe also cracked down on the demonstrations. He used the infamous Prevention of Terrorism Act to arrest activists and he threatened that he would again declare a state of emergency if protests recurred.
Human Rights Watch criticized that without respect for human rights, including the right to peaceful protest, Sri Lankans cannot hold politicians accountable. It is crucial, it said, that the country's international partners exert influence on the government. "Respect for human rights is an essential step in addressing the crisis."
The situation in Sri Lanka is stabilizing, but the road to recovery is still long
The island nation has received a long-awaited IMF loan, the first tourists are returning after the end of the pandemic, and energy prices are falling after the shock of the Ukraine war. But the country is not out of the danger zone.
Collapse has been averted after Sri Lanka received a $2.9 billion loan from the International Monetary Fund (IMF). A first tranche of $333 million was disbursed at the end of March. The loan from Washington clears the way for the granting of further loans of $7 billion from the World Bank and the Asian Development Bank.
What influence do these conditions have on our activity?
Growing our own fruit and vegetables at the girls' home "Vijitha Balika"
Consequently, more is now being grown in our orphanages for daily consumption. This means that the young adults and children learn how to create and manage a kitchen garden. A skill that is certainly very valuable in life. The first home-grown fruits and self-harvested vegetables have a completely different value.
Grocery shopping has become more important and more long-term oriented.
Purchasing for 2-3 weeks for the girls' home "Vijitha Balika"
Due to the rapidly changing food prices, one has to buy with a long term focus. Fortunately, Srilankapoint has a professional team on site. This team buys for all the homes and is thus able to negotiate cheaper prices through large orders.
More dependence on Srilankapoint
The cost of gas for cooking and electricity has risen sharply even though our homes are trying to reduce consumption
To run our homes, Srilankapoint has to spend more. We now need more than double to pay the running costs.
September 2022
Due to the enormous supply shortages of everyday goods such as gas for cooking, gasoline or diesel for the distribution of food and medicines, hunger has now arrived in many families. Many people in Sri Lanka can now only afford one meal a day, more than a few even less.
The videos from BBC and ARD show the situation on site vividly. In a country where the family is still the only secure value, it is much worse for orphans. Our subsidies are currently used exclusively for food and medicine. Out of this emergency situation, we thank you for every donation, no matter how small.
March 2022
Sri Lanka is in the midst of the biggest economic crisis since the country's independence in 1972. The current situation is devastating.
Already after the suicide attacks on hotels and churches in 2019, tourism, one of the country's most important foreign exchange earners, declined sharply. The Covid 19 pandemic, which followed shortly after, further exacerbated this situation: the tourism industry came to an almost complete standstill.
On 31 August 2021, the President of Sri Lanka, Gotabaya Rajapaksa, declared a state of economic emergency. This allows him to intervene directly in economic and political processes without the consent of parliament. There is no time limit on this extended power. This decision seems drastic when one takes into account that the problem was foreseeable for months already.
Sri Lanka has borrowed a lot in recent years, for example to make investments. However, the new highways, the international airport and the new Hambatota port have hardly been used. Instead of profits, these projects have been making losses for over ten years now and Sri Lanka is constantly borrowing to repay the loans.
Meanwhile, the mountain of debt is larger than the country's annual economic performance, which in turn has negative consequences for Sri Lanka's credit rating.
Furthermore, the food supply is deteriorating day by day. The country has enough rice, but many products for daily use, such as sugar or dairy products, have to be imported from abroad at high prices. However, the foreign currency to pay for these aliments is lacking because, among other things, tourism is not taking off. For the first time in the country's history, the Central Bank's official reserves are needed to import essential food, oil and medicine.
In short, food became scarce and prices shot up. In other words, inflation skyrocketed and the Sri Lankan rupee lost value drastically.
The consequences mainly affect the poorer population, which cannot supply itself with its own production.
One way out of the country's desperate situation is to increase local food production. This would make the country less dependent on imports from abroad. However, this is a process that takes time and cannot be achieved with the current emergency law.
It is obvious that our children's homes are now even more dependent on help.
February 2022
The Payagala Jayanthi Children’s Home, which is located 30 minutes by car from Bentota, has a very eventful past.
Originally, a German and his wife had a functional building constructed more than 20 years ago to serve as an orphanage. The orphanage, we are told, was run very successfully at that time. However, as they aged, the couple from Germany became unable to take care of the home personally. It was then taken over by state-appointed managers.
The necessary support couldn’t be provided to the same degree as it had been in the past and the home was, like many others, abandoned and left to itself.
After a tragic sexual abuse scandal, the state closed the home 12 years ago and the buildings were empty for several years.
Four years ago, the home was reopened, but its condition was abject. Only six boys were accommodated when we first visited. The pictures were very memorable: the home was lacking everything one could imagine. Srilankapoint was compelled to offer immediate aid.
Fortunately, a local person took care of the home during the first two years after its reopening. They partially reconstructed the building and the development of the home flourished. Sadly, this soon changed.
As mentioned in one of our latest updates, the country suffers strongly under the consequences of the COVID-19 pandemic as tourism has been shut down for almost two years now. This is fatal for orphanages, which were supported by locals. As large parts of the population don’t have enough food and lack the basic necessities themselves, there is nothing left to give to the orphanages.
Thus, Srilankapoint made a long-term commitment to support the home. We ensure enough food and a better future for the 31 boys.
Our experience during the past 20 years in this country has shown that an intense exchange with the people in charge is crucial to build mutual trust. After a 14-day business trip, Catherine Lieger defined the basis for cooperation as well as the necessary guidelines together with the people in charge. Based on this, we can build a successful cooperation to ensure impactful support.
Compared to other homes, the Payagala Jayanthi Children’s Home is still not up to our standards. However, with the help of Srilankapoint, there is a great chance of developing the home into an institution that respects the rights of children and offers them a brighter future.
August 2021
The coronavirus and its economic impact have hit Sri Lanka with unmitigated force. What happens when a virus spreads at lightning speed in a country with an ailing healthcare system, where even social distancing is almost impossible? The spread, if published figures are to be believed, has been greatly contained, but the economic impact on the lower classes, 80% of the population, is devastating.
Prices for everyday products have become unaffordable for many. At the same time, most of the casual laborers and those who work in the tourism industry have lost their jobs. The economic structures that were still partially functioning before the crisis have totally collapsed.
Currently, the lockdown has a stranglehold on the country's economy. There is an acute shortage of medicines. Even gas for cooking is now in short supply.
In a country where family structures are often the only support structure, orphanages have always been fighting a losing battle. The children often have no one to look after them, and they are completely dependent on the goodwill of their environment.
For years we have been supporting two orphanages and due to the extraordinary situation, we have taken on another.
We immediately changed our approach and are now focusing on ensuring food supply in our homes.
Thanks to our reliable helpers on the ground, even in these very difficult times, we can ensure that 100% of the donations are used for food and basic necessities.
We sincerely thank you for your support - we have never before had to make such an urgent appeal!
