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Wednesday, December 31, 2025

Forecasting the world in 2026

Forecasting the world in 2026

FT writers’ predictions for the new year, from the likelihood of higher Trump tariffs to the future of interest rates and the arrival of humanoid helpers

© Arusyak Pivazyan 

The FT’s forecasters did get one big thing right last year: Donald Trump’s return as US president has made the world even more unpredictable. Usually we are wrong on a couple of the 20 predictions (OK, sometimes four or five). Last year, we got seven wrong, our worst tally ever. There was no Ukraine-Russia peace deal — though talks have gone to the wire; US interest rates did fall; Elon Musk and Trump did fall out (though have since made up somewhat); Britain’s Labour government did produce another big tax-raising Budget. We were light heartedly over-optimistic on bitcoin’s prospects of topping $200,000, and too pessimistic on electric vehicles reaching a quarter of all global auto sales.

Undaunted, our writers are sticking their necks out again on topics ranging from the US midterms to China’s renminbi, the artificial intelligence bubble, private credit, and whether we will have humanoid robots in our homes and a functioning commercial quantum computer. Read on to find out more.

The FT’s crystal-ball gazers were again humbled by the winner of our reader competition, who asked not to be named, with 18 correct answers. To join in this year, submit your answers via the link below, with your real name and email address. Happy New Year! Neil Buckley

FT readers: submit your predictions for 2026

Will Trump’s tariffs on average end the year higher than now?

No. Having come into office threatening tariffs in all directions for reasons including raising revenue, protecting key industries, coercing trading partners into political alignment and closing the trade deficit, the US president has discovered it is more complicated than that. A big fall in stocks after April’s “liberation day”, threats of retaliation from China, other countries offering him concessions and rising consumer prices have taken the momentum out of his tariff campaign. By the year-end, a forthcoming Supreme Court ruling may have forced him to replace existing tariffs with different duties, but he will have largely backed off threats of new tariffs on semiconductors and pharmaceuticals and reduced others with ad hoc deals. Alan Beattie

Will Volodymyr Zelenskyy be forced to give up the Donbas as part of a peace deal for Ukraine?


No. Russia is demanding Ukraine give up the quarter of Donetsk province and the sliver of Luhansk that it has not been able to conquer after nearly four years of full-scale war. US negotiators appear to also believe that this is the price that Kyiv must pay for peace. But surrendering the rest of the Donbas would be too perilous for Zelenskyy for military, constitutional and political reasons. Pulling out to create a demilitarised zone that neither side controls would be unworkable and unacceptable to Moscow or Kyiv. Only an improbable collapse of its defences would force Ukraine to capitulate. Ben Hall

Will Republicans lose control of Capitol Hill?

Yes. Democrats will regain the House of Representatives in the November midterm elections but narrowly miss taking back the Senate. Controlling the lower chamber will enable Democrats to block Donald Trump’s agenda and open investigations into malfeasance in his administration. A third — though probably just as ill-fated — Trump impeachment process cannot be ruled out. Trump will do all he can between now and November to prevent a Democratic victory. Edward Luce

Will the AI bubble burst?

Yes. The easy money in the AI trade is behind us, three years after ChatGPT emerged, and investors are already asking tougher questions of the tech titans — witness the challenge to chips giant Nvidia stemming from Google’s AI catch-up and the pullback in the value of Meta. In that sense, the hype has already peaked. Now, even if AI underdelivers on function or value, those enormous diversified companies will survive just fine, which will help limit any broad market sell-offs to 10 to 15 per cent. But expect the froth to come off in 2026, with embarrassing losses in venture capital and private equity and blow-ups in smaller companies. Katie Martin

Will France hold snap elections?

No. With presidential elections due in spring 2027, most political parties are turning their minds to that


race. They see little incentive in a rerun of a 2024 legislative ballot that fragmented parliament, weakened a centrist bloc and made passing a budget or other legislation tortuous.

Polls show that splintering would persist in another snap election, giving no single force a majority; Marine Le Pen’s far-right Rassemblement National is the only party that stands to gain. President Emmanuel Macron has shot down any suggestion he would call an early presidential election. Sarah White

Will China’s renminbi appreciate?

No, not meaningfully. China’s enormous trade surplus says its currency is undervalued; its deflationary economy says it will stay that way. Foreigners may impose more tariffs on China during 2026 but the authorities are likely to absorb them rather than allow the currency to rise.

The renminbi stands at 7.01 versus the dollar. One-year forwards trade at 6.89. The currency will end 2026 no higher than that. Robin Harding

Will the firewall against Germany’s AfD collapse?

No. Chancellor Friedrich Merz’s refusal to let his conservative CDU engage with the AfD — locally and nationally — will be severely tested if the far-right party makes big gains in five scheduled regional elections. In the eastern state of Saxony Anhalt in September, the party co-led by Alice Weidel is projected to win close to a majority of seats, ahead of the ruling CDU.

Pressure within the CDU to revisit the Brandmauer rather than partner with the left will intensify — but any shift would probably fracture Merz’s governing coalition with the Social Democrats. Anne-Sylvaine Chassany

Will Sanae Takaichi still be Japan’s prime minister a year from now?

Yes. Statistically, the odds of any Japanese prime minister lasting more than a year are not good. And Takaichi, since October Japan’s first female PM, has plenty stacked against her: factions in her own party see her as too hardline, Beijing is doing all it can to destabilise her, and she has risen to the top job without a general election mandate.

But Takaichi represents something new in Japanese politics: she is a straight talker at a time of rising populism and remains popular even as inflation persists and interest rates rise. Bet on a spring general election, and a consolidation of power. Leo Lewis

Will central banks cease the rate-cutting cycle?

No. With Japan as a notable exception, central banks are more likely than not to cut interest rates further in 2026. Led by the US and the new Federal Reserve chair (probably Kevin Hassett), officials across the world are willing to ignore residual inflation and cut rates to what they think is a new normal and beyond. The Fed will point to rapid growth driven by high tech, arguing this is a rerun of the 1990s productivity boom.

European Central Bank president Christine Lagarde says monetary policy is in a good place, but the central bank will be willing to stimulate a bit more if growth falters. Chris Giles

Will Keir Starmer face a leadership challenge?

Yes. The Westminster cliché is “febrile” — that is already how the atmosphere around the Labour leadership of Starmer and his chancellor, Rachel Reeves, has felt in 2025. Look out for May, when poor Labour results in elections in Scotland, Wales and some English councils and likely success for Nigel Farage’s Reform UK could provide the impetus for a change at the top.

Contenders are already jostling. But a challenge would face big obstacles. During Labour’s last period in government, coups failed for lack of commitment and co-ordination. A leadership challenger needs the backing of 20 per cent of Labour MPs and to get past the party’s national executive. Miranda Green

Will more private credit ‘cockroaches’ emerge and cause significant losses?

Yes. Defaults on private loans have nearly tripled since 2022, as higher interest rates tested companies that racked up debt when rates were near zero. Even though the Fed has started cutting, that will not be enough for some. Many companies will need more time or an infusion of extra cash, and some will follow First Brands and Tricolor into messy bankruptcies. That will inflict losses on investors but would not destabilise the broader financial system unless the US economy does much worse. Brooke Masters

Will Saudi Arabia normalise relations with Israel?

No. As much as Trump wants it to happen after brokering a fragile ceasefire in the Israel-Hamas war in Gaza, the odds are stacked against it. Saudi Crown Prince Mohammed bin Salman has stood firm in insisting that the kingdom would only normalise if there were a “clear path” to establishing a Palestinian state.

Israeli Prime Minister Benjamin Netanyahu vociferously rejects this. Even if he loses this year’s election, Israel is unlikely to significantly soften its stance. And, given the outrage in the Muslim world over Israel’s war in Gaza, it is hard to see Prince Mohammed shifting his position. Andrew England

Will we have home robots?


Yes. In October, Palo Alto start-up 1X began taking pre-orders for Neo, its slender, soft-knit unitard-clad humanoid robot. For $20,000 customers were told to expect delivery in 2026. Embodied AI is moving robotic butlers from virtual environments to the real world.

Companies like Tesla, Figure AI and Unitree are competing to build self- directing models that will carry out chores. But recreating human dexterity is an expensive work in progress — even just to fold laundry. Reports show Neo is not yet fully autonomous. This is one for the wealthy early adopters. Elaine Moore


Will African growth outstrip Asian growth?

Yes, but it will be close. As China slows, average growth rates across Asia in 2026 could fall to 4.1 per cent, says the IMF. Africa, coming off an altogether lower base, is seen nudging up from 4.1 per cent.

Despite some terrible news — war in Sudan, spreading extremism in the Sahel and a spate of coups — Africa is benefiting from a weak dollar, strong gold prices and sounder fiscal policies. Half of the world’s 20 fastest-growing economies next year are expected to be African. Bigger economies like Egypt and Nigeria are also growing after painful structural reforms. Even collectively, though, Africa’s 54 economies are still too small to shift the global needle. David Pilling

Will the gold price go above $5,000 an ounce?


Yes. Gold’s blistering rally is likely to continue, albeit at a more measured pace. Driving factors may include central bank buying, as well as investors who see gold as a hedge against looming fiscal deficits, geopolitical fracturing and the debasement of “fiat” currencies.

In a world where uncertainty is the new normal, and with cracks appearing in the dollar’s role as a reserve currency, bullion’s bull run has further to go. Leslie Hook

Will we have a robust, commercially viable quantum computer in operation?

No, but it won’t be much longer before we do. Several tech companies have already developed rudimentary quantum computers, currently used in parallel with classical computers to perform operations neither can do on their own. Rapid advances are being made in both hardware and software to exploit the spooky properties of subatomic physics.

Even if timelines are unknowable, governments say companies should start securing sensitive data in anticipation of a post-quantum world. Robust quantum computers will render most of today’s encryption methods obsolete. John Thornhill

Will Lula win a record fourth term as Brazilian president?

Yes. Barring a last-minute health problem, Luiz Inácio Lula da Silva is favourite to win next October’s election even at 80. A formidable campaigner, the leftwinger will benefit from a robust economy and from standing up to Trump’s blandishments.

Own goals by Brazil’s right are also helping him. Some conservatives argued for US sanctions to punish Brazil for trying former president Jair Bolsonaro on charges of plotting a coup, but the strategy backfired as Lula rallied the nation behind him. Rightwingers are squabbling too over whether Bolsonaro’s son Flávio should represent them now his father has been jailed, or a more moderate candidate. Michael Stott

Will an entirely AI-generated song top the charts?

No. A gritty AI warbler called Breaking Rust reached number one in an obscure US country chart this


year, a portent of the onward march of the machines. But they will falter at the Everest of the main US and UK singles charts.

The spin-off songs from Netflix’s film KPop Demon Hunters show that fictional acts can have big hits, but were propelled by storylines and characterisations that AI cannot match. Neither can it fabricate the personability vital to real stars such as Olivia Rodrigo, nor the clash of personalities in Kendrick Lamar’s chart-topping feud with Drake. Ludovic Hunter-Tilney

Will Elon Musk’s Tesla reverse its market share declines in the US, the EU and China?

No. Tesla remains under pressure in the US with federal tax credits for electric vehicles expiring and the president rolling back rules to reduce vehicle emissions. The outlook is less predictable in China and Europe. Despite launching a more affordable version of its flagship Model Y, much of what has led to Tesla’s share decline in 2025 will remain the same.

BYD and other Chinese rivals will launch yet more new models with attractive pricing. Musk is meanwhile more focused on investing in AI and deploying self-driving robotaxis than rebooting Tesla’s traditional automotive business. Kana Inagaki

Will a woman rank in the top 50 best-paid athletes?


No. Despite rapid recent growth, pay in women’s sport is still way below that of male athletes. Coco Gauff was 2025’s highest-paid female athlete, according to Sportico, with $31mn earnings. But that would not have put her in the most recent top 100 ranking, where the lowest-paid man made more than $37mn.

Breakout basketball star Caitlin Clark had total income of $16mn, but a salary of just $114,000. Only Naomi Osaka and Serena Williams have cracked the top 50 in recent years. Gauff has yet to garner enough big global endorsements or Grand Slam wins to hit those heights. Josh Noble

Tiebreaker: How many executive orders will Donald Trump issue in 2026?

Sunday, December 28, 2025

28.12.2025 ஞாயிற்றுக்கிழமை இரவு 8.30 மணி

28.12.2025 ஞாயிற்றுக்கிழமை இரவு 8.30 மணி

காற்றுச் சுழற்சி, கனமழை மற்றும் நிலச்சரிவு நிகழ்வுகள் தொடர்பான விழிப்பூட்டலும் முன்னெச்சரிக்கையும்.
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முன்னரே குறிப்பிட்டபடி தென்கிழக்கு வங்காள விரிகுடாவில் இந்தோனேசியாவின் மேற்கு பகுதியில் காற்று சுழற்சி உருவாகியுள்ளது. இது அடுத்து வரும் நாட்களில் மேற்கு வடமேற்கு திசையில் நகர்ந்து எதிர்வரும் 02.01.2026 அன்று இது தாழமுக்கமாக மாற்றம் பெற்று இலங்கையின் கிழக்கு தென்கிழக்கு திசையில், இலங்கையின் கரையோரமாக நிலவி பின் இலங்கைக்கு தெற்காக மேற்கு நோக்கி நகர்ந்து குமரிக்கடலைச் சென்றடையும் என எதிர்பார்க்கப்படுகிறது.
இதன் காரணமாக இன்று கிழக்கு மாகாணத்தின் சில பகுதிகளுக்கு மழை கிடைக்க தொடங்கியுள்ளது.
நாளையும் (29.12.2025) வடக்கு, கிழக்கு, வட மத்திய மற்றும் ஊவா மாகாணங்களின் சில பகுதிகளுக்கு மிதமான மழை கிடைக்கும் வாய்ப்புள்ளது.
நாளை மறுதினம் (30.12. 2025) முதல் வடக்கு, கிழக்கு, வட மத்திய, தென், மத்திய மற்றும் ஊவா மாகாணங்களின் பல பகுதிகளுக்கும் மழை பரவலடையும் வாய்ப்புள்ளது.
எதிர்வரும் 31.12.2025 முதல் 04.01.2026 வரை வடக்கு, கிழக்கு, மத்திய, ஊவா வட மத்திய, மற்றும் தென் மாகாணங்களின் பல பகுதிகளுக்கும் கன மழை கிடைக்கும் வாய்ப்புள்ளது. இந்நாட்களில் குறிப்பாக கிழக்கு, ஊவா, மத்திய மற்றும் மாகாணங்களின் சில பகுதிகளுக்கு மிகக் கனமழை கிடைக்கும் வாய்ப்புள்ளது.
பதுளை, நுவரெலியா, காலி,மாத்தறை கண்டி மட்டக்களப்பு, அம்பாறை, மாவட்டங்களின் சில இடங்களில் 31.12.2025, மற்றும் எதிர்வரும் ஜனவரி 01, 02, 03 ம் திகதிகளில் 150 மி.மீ. க்கு மேற்பட்ட மழை கிடைக்கும் வாய்ப்புள்ளது.
குறிப்பாக....
எதிர்வரும் 31.12.2025 அன்று கொஸ்லாந்தை, வெல்லவாய, புத்தள, கல்மதுல்ல, ஹப்புத்தள, அதல போன்ற பகுதிகளிலும் ( படத்தில் வட்டமிட்டு காட்டப்பட்டுள்ளது.)
எதிர்வரும் 01.01.2026 அன்று வெலிப்பிட்ட, கொரவின்ன, லபுகெங்கொட, மித்தெனிய, திருகோணமலை போன்ற பகுதிகளிலும் ( படத்தில் வட்டமிட்டு காட்டப்பட்டுள்ளது)
எதிர்வரும் 02.01.2026 அன்று நாகெட்டிய, லெமஸ்தோட்ட, கொட்டபத்ம, ஏகொடவத்த, கொஸ்லாந்தை, வெல்லவாய, புத்தள, கல்மதுல்ல, ஹப்புத்தள, அதல போன்ற பகுதிகளிலும் ( படத்தில் வட்டமிட்டு காட்டப்பட்டுள்ளது.)
மிகக் கனமழை கிடைக்கும் வாய்ப்புள்ளது ( திகதி மற்றும் இடங்களில் சில மாற்றங்கள் நிகழக்கூடும் என்பதையும் கருத்தில் கொள்ளவும்)
இந்த கனமழை மத்திய, ஊவா மாகாணங்களின் பல பகுதிகளிலும் நிலச்சரிவு அனர்த்தத்தை தூண்டலாம்.
ஆகவே அன்புக்குரிய மலையக உறவுகளே, இந்த நாட்களில் கனமழையுடன் கூடிய நிலச்சரிவு அனர்த்தங்கள் தொடர்பில் மிக அவதானமாக இருப்பது அவசியம்.
- நாகமுத்து பிரதீபராஜா -
பேராசிரியர் மற்றும் தலைவர்,
புவியியற்றுறை,
யாழ்ப்பாணப் பல்கலைக்கழகம்.

2025.12.28 ඉරිදා රාත්රී 8.30
සුළං සංසරණය, තද වැසි සහ නායයෑම් සිදුවීම් පිළිබඳ ඇඟවීම් සහ අනතුරු ඇඟවීම්.
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පෙර සඳහන් කළ පරිදි, ඉන්දුනීසියාවට බටහිරින් ගිනිකොනදිග බෙංගාල බොක්කෙහි සුළං සංසරණයක් නිර්මාණය වී ඇත. ඉදිරි දිනවලදී එය බටහිර-වයඹ දෙසට ගමන් කරනු ඇතැයි අපේක්ෂා කරන අතර 2026.01.02 වන දින එය පීඩන අවපාතයක් බවට පත් වී ශ්රී ලංකාවේ නැගෙනහිර-ගිනිකොන දෙසින්, ශ්රී ලංකාවේ වෙරළ තීරය ඔස්සේ පවතිනු ඇති අතර පසුව ශ්රී ලංකාවට දකුණින් බටහිර දෙසට ගමන් කර කුමාරි මුහුදට ළඟා වනු ඇත.
මේ හේතුවෙන් නැගෙනහිර පළාතේ සමහර ප්රදේශවලට අද වැසි ලැබීම ආරම්භ වී ඇත.
හෙට (2025.12.29) උතුරු, නැගෙනහිර, උතුරු මැද සහ ඌව පළාත්වල සමහර ප්රදේශවලට මධ්යස්ථ වැසි ලැබීමට ඉඩ ඇත.
හෙට (2025.12.30) සිට උතුරු, නැගෙනහිර, උතුරු මැද, දකුණු, මධ්යම සහ ඌව පළාත්වල බොහෝ ප්රදේශවලට වැසි පැතිර යාමට ඉඩ ඇත.
2025.12.31 සිට 2026.01.04 දක්වා උතුරු, නැගෙනහිර, මධ්යම, ඌව, උතුරු මැද සහ දකුණු පළාත්වල බොහෝ ප්රදේශවලට තද වැසි ඇති වීමට ඉඩ ඇත. මෙම දිනවල, විශේෂයෙන් නැගෙනහිර, ඌව, මධ්යම සහ පළාත්වල සමහර ප්රදේශවලට ඉතා තද වැසි ඇති වීමට ඉඩ ඇත.
බදුල්ල, නුවරඑළිය, ගාල්ල, මාතර, මහනුවර, මඩකලපුව, අම්පාර දිස්ත්රික්කවල සමහර ස්ථානවලට 2025.12.31 සහ ජනවාරි 01, 02 සහ 03 යන දිනවල මිලිමීටර් 150 ට වැඩි වර්ෂාපතනයක් ලැබීමට ඉඩ ඇත.
විශේෂයෙන්....
ඉදිරි 2025.12.31 වන දින කොස්ලන්ද, වැල්ලවාය, පුත්තලම, කල්මඩුල්ල, හපුතලේ, අටල (රූපයේ රවුම් කර ඇත) වැනි ප්රදේශවලට 2025.12.31 වන දින වැසි ඇති වීමට ඉඩ ඇත.
ඉදිරි 2026.01.01 දින වැලිපිට, කොරවින්න, ලපු-ලපු, මිතේනිය, ත්රිකුණාමලය වැනි ප්රදේශවල (රූපයේ රවුම් කර ඇත).
ඉදිරි 2026.01.02 දින නාගෙඩිය, ලේමස්තොට, කොට්ටපද්ම, එගොඩවත්ත, කොස්ලන්ද, වැල්ලවාය, පුත්තලම, කල්මඩුල්ල, හපුතලේ, අටල (රූපයේ රවුම් කර ඇත) වැනි ප්රදේශවල (රූපයේ රවුම් කර ඇත).
ඉතා තද වැසි ඇති විය හැකිය (දිනයන් සහ ස්ථානවල යම් යම් වෙනස්කම් සිදුවිය හැකි බව කරුණාවෙන් සලකන්න)
මෙම තද වර්ෂාව මධ්යම සහ ඌව පළාත්වල බොහෝ ප්රදේශවල නායයෑම් විපත් ඇති කළ හැකිය.
එබැවින්, ආදරණීය කඳුකර ජනතාවනි, මේ දිනවල අධික වර්ෂාව සමඟ නායයෑම් විපත් සම්බන්ධයෙන් ඉතා ප්රවේශම් විය යුතුය.
- නාගමුතු ප්රතිපරාජා -
මහාචාර්ය සහ ප්රධානී,
භූ විද්යා දෙපාර්තමේන්තුව, යාපනය විශ්ව විද්යාලය. 


















Jaishankar’s Lanka visit - சென்றவாரம் இலங்கை

 Jaishankar’s Lanka visit on short notice as Modi’s special envoy underscores powerful geopolitical message

Sunday Times lk 28-12-2025

  • Govt. caught unawares; Herath rushes from Parliament to foreign office to answer phone call from Delhi
  • Events during the visit show it is India in control, with an underprepared Sri Lankan side remaining largely silent
  •  Indian EAM’s trip preempts visit by a Chinese Communist Party delegation to Lanka
  • Ruling NPP suffers setback in CMC budget vote; one-time allies accuse mayor of sidelining them from council affairs

 

By our Political Desk


The sudden phone call from India’s External Affairs Minister Dr S. Jaishankar last week saying he was coming to Sri Lanka as his Prime Minister Narendra Modi’s special envoy must have taken the Sri Lankan government by surprise. Foreign Minister Vijitha Herath was in Parliament, where the government was voting on additional funds for the recovery process from Cyclone Ditwah, when he was sent a note that his Indian counterpart was wanting to get through to him urgently. Minister Herath rushed back to his ministry to take the call to be told of the visit.


Confirmation of the Jaishankar visit to Sri Lanka came from the Indian side. The Indian External Affairs Ministry in New Delhi announced on Monday that its minister will visit Sri Lanka the next day. “The visit underscores India’s Neighbourhood First Policy,” it said. The Ministry of Foreign Affairs in Colombo was silent on the visit.  The Sunday Times heard of the visit earlier and announced it last week (Dec. 21). President Anura Kumara Dissanayake’s movements, if any, had to be restricted for the visiting dignitary. He was coming not as Minister of External Affairs but as Modi’s special envoy, which gave him a higher status, protocol-wise. If there were other appointments already pencilled in, the diary had to be cleared.


It was no coincidence that the Indian VIP was arriving in the midst of a previously scheduled visit by a Chinese delegation. Thus, Dr Jaishankar, whose government wanted it known they were the ‘first (foreign) responder’ to the Ditwah disaster, and rightly so, made it to Colombo in an Indian private jet 24 hours before the Chinese delegation arrived.


President Dissanayake greeting Indian External Affairs Minister S. Jaishankar ahead of bilateral talks at the Presidential Secretariat in Colombo on Tuesday

It was Deputy Tourism Minister Ruwan Ranasinghe who was rushed to Katunayake to greet Dr Jaishankar on arrival. Video clips showed the deputy minister walking behind the visiting VIP and the Indian High Commissioner after the welcome. Here too, an announcement came from Dr Jaishankar’s own X post. “Landed in Colombo this evening… Look forward to my meeting with Sri Lankan leadership tomorrow,” he tweeted. Still, there was no announcement from the Sri Lankan government.





On Wednesday (Dec. 23), Dr Jaishankar met President Dissanayake and handed him a letter from Prime Minister Modi. Again, it was Dr Jaishankar who tweeted, “Pleased to call on H.E. President @anuradissanayake in Colombo today. Conveyed Prime Minister @narendramodi’s warm wishes and message of solidarity in the aftermath of Cyclone Ditwah.” 


It went on to list the work his government had done under its ‘Operation Sagar Bandhu’ and announced a commitment of USD 450 million to Sri Lanka—of which USD 350m is on a credit line and USD 100m a grant. The fact that India was the ‘first responder’ was emphasised in the tweet, apart from mentioning “the building on our civilisation ties”.


He referred to the Indian Humanitarian Assistance and Disaster Relief (HADR) as a ‘glowing tribute’ to India’s military, humanitarian, medical material, logistical and technical prowess, promoting the country’s policy goal as a first responder and net security provider from a regional force to a global maritime vision.


The Indian minister in his post referred to Sri Lanka as its closest maritime neighbour.

Soon after meeting President Dissanayake, the Sri Lankan media was told there would be a “press statement’ by the visiting minister—again, the invitation came from the Indian High Commission in Colombo. But it was an invitation to attend by listening to the live coverage on YouTube from the comfort of their newsrooms—not in person. There was no invitation from either the Presidential Secretariat (where the statement was read out), the Foreign Ministry or the Media Ministry of the host government. The entire visit seemed to be orchestrated by the visitors. Not only was this unprecedented, but when the Indian minister came to the podium to read out his speech, there were clapping and cheers from inside the Sri Lankan Presidential Secretariat, which continued after he finished reading out the text.

Chinese delegation chief Wang Junzheng in conversation with JVP General Secretary Tilvin Silva at the party's Pelawatte headquarters

The Indian High Commission was careful to say it was a ‘press statement’ that the minister read out. The Sri Lankan Foreign Ministry at last decided to say something on the visit and sent a “Statement to the Media” quoting the Foreign Minister Herath’s welcome address at the event. It was a ‘statement to the media’ read to it through YouTube in the presence of a largely Indian delegation.


Later in the day, the visiting special envoy met with Prime Minister Harini Amarasuriya, who was feted big-time in India only weeks ago, and Sri Lankan northern political leaders. The official photograph released shows the local leaders seated in a row listening attentively to the minister seated on the opposite side.


With its neighbourhood in crisis and the situation in Bangladesh worsening vis-à-vis India, and China seemingly making gains in the region, especially in the Indian Ocean, a constructive role in Sri Lanka, for the second time in recent years, enhances India’s global image as a stabilising force in the neighbourhood and an effective strategic and defence partner for external powers.


Dr S Jaishankar also took the time to meet Tamil political leaders from the North and the upcountry plantation sector that witnessed significant damage, including loss of lives, during Cyclone Ditwah.

The Tamil nationalist parties’ delegation, led by Ilankai Thamil Arasu Katchchi (ITAK) president C.V.K. Sivagnanam, reiterated India’s diplomatic push to ensure the government holds the much-delayed Provincial Council election at the earliest.


In addition to ITAK, representatives from the Eelam People’s Revolutionary Front (EPRLF), the People’s Liberation Organisation of Tamil Eelam (PLOTE), the Tamil Eelam Liberation Organisation (TELO) and the All Ceylon Tamil Congress (ACTC) took part in the meeting.


Collectively, they pointed out that India has a ‘moral duty’ to ensure PC polls were held on time, stressing that the ‘PC system’ was the brainchild of India, and later it was introduced into the country’s constitution through the 13th Amendment.


“We have pointed out the need to have the PC polls on time since most of the PCs’ terms expired over a decade ago. As a party that has secured successive mandates from Tamil people for power devolution based on a federal structure within an undivided country, we stressed India’s role in this,” ITAK President Sivagnanam said.


Chinese CCP delegation in Colombo


Hot on the heels of the visit by the Indian External Affairs Minister, a high-profile delegation from the People’s Republic of China led by Wang Junzheng, Member of the 20th Central Committee, Communist Party of China, and Secretary of the CPC Committee of the Xizang Autonomous Region, arrived in the country.


The Chinese delegates met with President Dissanayake at the Presidential Secretariat hours after Dr Jaishanker’s meeting. NPP sources were keen to stress that the Chinese visit was mainly to strengthen party-to-party ties, namely between the Chinese Communist Party (CCP) and the Janatha Vimukthi Peramuna (JVP), the main constituent party of the NPP.


The Chinese delegates told the President that China will collaborate with Sri Lanka to enhance the understanding and friendship that was established between the leaders of both nations during President Dissanayake’s official visit to China and will continue to support the ongoing projects in Sri Lanka and initiate new projects.


They also pledged additional support for Cyclone Ditwah recovery efforts, but there was no announcement of financial support by way of grants or loans.


The Chinese Embassy also hosted an event at the Colombo Shangri-La Hotel where the members of the Chinese delegation shared insights on China’s 15th Five-Year Plan (2026-2030). Among those in attendance at the event were former president Maithripala Sirisena and Opposition Leader Sajith Premadasa.


The Chinese delegates also met with the JVP General Secretary Tilvin Silva at the JVP headquarters at Pelawatta on Wednesday. The two sides discussed the long-standing friendship and cooperation between the Communist Party of China and the JVP.


The JVP General Secretary, who undertook an official visit to China in June, briefed the Chinese delegation on the history of the JVP, the current political situation in Sri Lanka, and cooperation activities in line with the Memorandum of Understanding signed during President Dissanayake’s official visit to China.


Both sides also exchanged views on the need for, and measures to, strengthen cooperation between the Communist Party of China and the JVP in the coming year.


CMC budget defeat


On the domestic political front, a string of recent budget defeats at local councils where the ruling NPP had secured razor-thin majorities would have given government leaders cause for concern that the budget of the all-important Colombo Municipal Council (CMC) could also be in trouble. Among some members of independent groups whose support has been crucial to securing the NPP a majority at the CMC, there had been grumblings and rumblings over the past few weeks that the ruling party had since been sidelining them in council affairs and that their views had not been considered seriously during the drafting of the 2026 budget. Tensions had also mounted during powerful standing committee meetings where it was alleged that the NPP was not giving heed to concerns raised by councillors from other parties and groups supporting the administration. The level of concern in the NPP hierarchy that things were not going well was apparent when President Dissanayake himself hosted a meeting for nine CMC members from smaller political parties and independent groups on December 19 in a last-minute attempt to address concerns raised by some of them.


Even President Dissanayake could not save the day for his party this time. When the final votes were tallied late on Monday (22) night, the CMC’s Budget 2026 had been defeated by a majority of three votes, with the final count being 60 to 57 in favour of the opposition. “You didn’t defeat the NPP budget; you defeated the budget of your conscience,” Mayor Vraie Cally Balthazar told those who had voted against the budget as they broke into applause after the final result was announced. She insisted that her party had reached out to all parties and groups over the past six months and intervened irrespective of party politics whenever any issue came up. “We know our administration is perfectly just,” she added.


Despite the brave face following the defeat, Ms Balthazar did not respond to a request for comment. Instead, in a message posted on her Facebook page on Tuesday, she said her administration presented a strong, people-focused budget to uplift the city. “Though shaped through a consultative process that included opposition input, it was voted down for political reasons rather than substance. The process now moves to a second reading, where amendments can still be submitted. My mandate as mayor remains unchanged. This budget will take effect in two weeks, and the work we set out to do will continue.”


The CMC’s budget is due to be presented for a second time next Wednesday (Dec. 31).

Mayor Balthazar had been elected via a controversial secret ballot at the CMC’s inaugural meeting on June 16, defeating the Samagi Jana Balawegaya’s (SJB) Riza Zarook, who had challenged her with the backing of several other parties and groups. The final vote following a highly charged secret ballot was 61 to 54 in favour of the NPP candidate. The SJB and several other parties who had formed a combined opposition had strongly protested the method of selecting heads of local councils via secret ballot, arguing that members should be allowed to choose the heads of their councils via an open vote. They had also argued that a secret ballot opened the vote up to bribery, with various perks and, in some cases, even cash being offered for councillors to switch sides. Nevertheless, as far as the CMC was concerned, Mr Zarook’s candidacy had also not been universally endorsed by all members of the combined opposition, with at least one United National Party (UNP) councillor writing to his party’s general secretary opposing his nomination for mayor.


Ms Balthazar’s election as mayor was a historic win for the NPP, which had won control of the CMC for the first time in history. It was also a personal triumph for President Dissanayake, who, in a highly unusual move by a head of state, had been actively involved in wooing members of smaller political parties and independent groups to support the NPP’s mayoral candidate. The President’s personal involvement underscored the importance both he and his party had placed on securing control of the CMC, where, though the NPP had emerged as the largest party with 48 members, it still lacked the 59 seats to secure an absolute majority in the 117-member council. As such, Monday’s defeat was not just a setback for the NPP in general but also a source of personal embarrassment for the President, who has been forced on multiple occasions over the past year to intervene to dig his government and party out of awkward situations of its own making.


CMC sources disclosed that since Ms Balthazar’s election as mayor, the 48-member NPP had received the support of 11 members from smaller political parties and independent groups, as well as a member from the UNP now functioning as an independent, giving them 60 seats in the council. The recognised political parties supporting the NPP are the United Peace Alliance (UPA), which has two members, and the Democratic National Alliance (DNA), which has one member. Aside from the dissident UNPer, who claims he acts as an independent member, other members are from four different independent groups, with one group having three members, two groups having two members each and one member being the sole representative of his independent group. During Monday’s vote, three among them joined an assortment of other parties and groups that included the SJB, the UNP, the People’s Alliance (PA), the Sri Lanka Podujana Peramuna (SLPP), the Sri Lanka Muslim Congress (SLMC), Sarvajana Balaya (SB) and the National Freedom Front (NFF) to defeat the NPP’s budget.

Those who had previously supported the NPP but switched sides on Monday were two members from Independent Group 05, which had contested under the ‘cricket bat’ symbol, and the lone member from Independent Group 02, which had contested under the ‘football’ symbol.


While Mayor Balthazar claims her party had reached out to all and that her administration is “perfectly just”, those who had voted to defeat her budget dispute this and claim their ‘No’ vote was designed to send a message to the mayor and the NPP.


Suranji Laksiri, leader of the independent group that contested under the ‘cricket bat’ symbol, said he and the other CMC member in his group voted against the budget over disappointment that some elements of the NPP within the CMC were going down the same “corrupt path” that it had accused former council administrations of taking. Mr Laksiri, who had earlier been the Colombo organiser of the SJB, said he decided to step away from the party and contest the CMC election independently earlier this year owing to a desire to forge his own political path. “I initially voted (for Mayor Balthazar) out of trust placed in President Dissanayake and as a sign of my respect for him. I campaigned on an anti-corruption platform, but unfortunately, there are signs that even some of the newly elected people, who had replaced the earlier group, are doing the same thing.”


Mr Laksiri said he had questions as to whether “thieves” at the CMC are being caught or if they are actually multiplying under the new administration. “Our ‘No’ vote was a message to tell them they should not become like the other lot (that they replaced). What they should do now is catch the wrongdoers from earlier and move forward.” He questioned why the NPP had not been more active towards cracking down on corruption at the CMC. “As things stand now, if the same things are still happening, there is no difference whether we stand with them (NPP) or the other lot (Opposition).”

He stressed he still had respect for both the CMC’s mayor and deputy mayor, “but it looks as if they are being forced to do nothing. That will not do. We supported the NPP to strengthen the President, not for various people to strengthen their own power and enrich themselves.”


Explaining his ‘No’ vote, Upali Weliwatta, Group Leader of the independent group that had contested under the ‘football’ symbol, said he voted against the budget because the NPP administration had failed to keep its promises over the past six months. “There was no sense of collaboration after the election of the mayor. The 48 members of the NPP ran the CMC administration arbitrarily and according to their own whims and fancies, disregarding the views of independent groups like us. In this situation, we didn’t want to stand by and let them continue to the next year as if we approve of all that has been happening,” he said.


He complained that though the NPP had invited independent groups such as his to submit their proposals for the budget, none of their proposals had been incorporated. “We waited for them to talk to us, but nothing happened until the last moment, when the President invited us for a meeting on December 19. At the meeting, the President gave instructions on how to implement our proposals, but those from the NPP argued against doing so. As such, I thought, if they are saying ‘no’ to the President himself, there is no further point in us continuing to support them.”


Mr Weliwatta said he believes President Dissanayake is intent on doing something different, but the question is whether those around him are as intent on enacting a system change as he is. He said the NPP had yet to reach out to him positively after Monday’s budget defeat and added, as things stand at present, he intends to vote against the budget when it is presented again on Wednesday.


For the main opposition, SJB, which has 29 members in the CMC, the budget’s defeat “reflects a reality that goes beyond politics,” said SJB Municipal Councillor Roy Bogahawatta, who has been a CMC member for 24 years. He pointed out that the budget was defeated when three members who had supported the NPP opted to vote against the budget. “The NPP administration in the CMC is a coalition. As such, it is incumbent on the NPP to invite these smaller parties and independent groups for the consultation process of the budget and give due consideration to their proposals. Some have complained they had not even been given a time to meet the mayor to raise their concerns. If even those who supported the NPP aren’t given that courtesy, if their proposals are not given consideration in the budget, and if the CMC administration is being run from Pelawatta (the JVP-NPP headquarters), do you really expect councillors to vote in favour of such a budget?”


He claimed those who voted to defeat the budget were being vilified on social media by “mudslinging groups” being operated by the NPP but insisted that blame for the budget defeat rested solely with the NPP itself. The opposition is fully aware that under the Municipal Council Ordinance, defeating the budget will have no impact on the CMC administration and that the mayor and deputy mayor can continue in their roles for two years, he pointed out. “Our message to the NPP administration is to listen to us at least now. You can’t continue disregarding everyone while being drunk on power.” He added that the opposition intends to also defeat the budget when it is presented a second time.

The government has attempted to play down the impact of the CMC’s budget defeat, pointing out that the budget will be presented a second time and that even if that is defeated, the council administration can continue for two years. There are, however, negotiations ongoing behind the scenes to avoid a second humiliation by persuading enough members to support the budget when it is presented on Wednesday.


The United Peace Alliance (UPA), with two members in the CMC, is one of the political parties that has continued to stand with the NPP and voted in support of the CMC’s budget on Monday. The party represents the interests of the Muslim community in Colombo. “After the election of the mayor via secret ballot, she invited all of us to come and help with the administration. We decided to accept that invitation. We were given chairperson positions in one or two standing committees, and we continued our work from there. We feel that you cannot judge an administration’s record in just six months. They need to be given more time,” argued Party General Secretary and Councillor Kaleelur Rahman. He said the UPA was not prepared to take decisions blindly, noting the budget’s defeat would not affect the NPP’s hold on the CMC either.


The budgets of a significant number of other NPP-controlled councils have been defeated over the past three weeks; some more than once. The budget of the Hikkaduwa Urban Council, for example, was defeated for the third time on Wednesday (24) by one vote, while the Peliyagoda Urban Council’s budget too was defeated by a single vote on the same day.


In the face of these embarrassing and demoralising defeats, the NPP members of some local councils whose budgets had been defeated once have allegedly resorted to what opposition parties claim are irregular and fraudulent methods to get these budgets passed. On Tuesday (23), opposition councillors at the Horana Urban Council, where the ruling NPP’s budget had already been defeated once, accused the NPP of adjusting the council hall’s clock ahead by five minutes to convene the meeting and pass the amended budget before councillors from other parties walked in.


Meanwhile, the passage of the budget of the Galle Municipal Council descended into chaos on Wednesday (24) when opposition councillors held a revote by preventing the council’s secretary from leaving the hall after disputing the earlier result.


When the budget was first presented to the Galle MC on December 15, it had been defeated by a majority of two votes. When the votes were first tallied on Wednesday, though, the count was 21 votes in favour of the budget and 15 against. Amid protests from opposition members, Mayor Sunil Gamage then adjourned the council meeting and left the chamber after announcing that the budget had been passed by a majority vote. Furious opposition councillors then rushed to prevent the council secretary from leaving with him. What followed were ugly scenes witnessed in full view of the media as opposition councillors manhandled the secretary and, despite the efforts of both the police and council officials, forced her back into her seat. Opposition members then held a revote, with one of their own in the mayor’s chair. The final tally this time was 17 votes against the budget, with 19 members listed as absent. The opposition then declared that the budget had failed to pass. They argued that their result should be treated as official, as it was the one that the secretary had placed her signature on. Mayor Gamage, however, argued that the budget was duly passed and condemned opposition parties for taking the council’s secretary “hostage” and said they have already lodged a police complaint over the matter. It is still not clear which result is going to be treated as official, and the matter is under legal review.


Nothing drastic is going to happen in any of the local councils, including the CMC, where budgets for the next year have been defeated, said Manjula Gajanayake, Executive Director of the Institute for Democratic Reforms and Electoral Studies (IRES). He noted the situation is the same for municipal and urban councils as well as pradeshiya sabhas. “Normally, at the local government level, a defeat of a budget is not considered a big issue.”


In 2014, the then United People’s Freedom Alliance (UPFA) amended the Local Authorities Act, allowing local council administrations to continue for the first two years despite the defeat of their budgets. As such, heads of institutions appointed in Colombo and elsewhere can continue to operate and move forward without interruption until December 2027.


Nevertheless, having so many ‘hung’ councils where parties and groups have been forced to rely on others to form administrations reflects an underlying problem where laws designed for one electoral system are being applied for a different system, Mr Gajanayake noted. The legal provision introduced by the UPFA in 2014 was originally designed for a proportional representation (PR) system, but it is now being applied to a mixed-member proportional representation system (MMP). “The same law is being used for two incompatible electoral systems. In local government elections prior to 2018, even when two political parties received the same number of votes, one would often gain two bonus seats.

In many areas, because of the PR system, these two bonus seats allowed one party to achieve a clear victory. However, under an MMP system, the total number of seats held by different groups often equals or exceeds the number of members in the ruling party.” As such, he opined that the solution would be to repeal the provisions related to the budget process under the Local Authorities (Special Provisions) Act, No. 21 of 2012, as amended by the UPFA. Repealing the amendments would allow the local councils, under whatever party, to continue with their full four-year term.


No Auditor General yet


Away from the limelight of hosting foreign visitors and the drama of budget defeats, the delay in nominating a suitable candidate for the post of Auditor General by President Dissanayake continued to draw concerns from different quarters this week.


The Bar Association of Sri Lanka (BASL) wrote to the President on Tuesday expressing its deep concern regarding the prolonged failure to appoint a permanent Auditor General following the retirement of the former Auditor General in April 2025.


The BASL said the urgency of this appointment is heightened by the present circumstances, as Sri Lanka is emerging from a financial crisis with the support of the Extended Fund Facility of the International Monetary Fund and other international agencies.


In addition, the country is currently receiving foreign financial assistance in response to the disaster situation caused by Cyclone Ditwah. In this context, financial accountability and transparency of state institutions are of paramount importance.


The BASL also noted that the person nominated thus far by the President for the post of Auditor General has not gained the acceptance of the majority of the Constitutional Council. “It is therefore imperative that a candidate of proven competence, integrity, and independence – who commands wide acceptance within the Constitutional Council – is appointed, rather than a partisan figure,” the BASL letter said.


SJB MP Harsha de Silva, who chairs the Committee on Public Finance (CoPF), also wrote to the President this week expressing serious concern over the failure to appoint a permanent AG, warning that the absence of this constitutionally mandated position is undermining parliamentary oversight of public finances.


In his letter, Dr de Silva pointed out that the post has remained vacant since December 7, following the conclusion of the tenure of the Acting Auditor General on December 6, leaving the country without either a substantive or acting Auditor General.


As such, the Audit Service Commission is unable to function due to the lack of a chairman, creating what he described as a critical institutional gap at a time of heightened fiscal vulnerability.


SLPP General Secretary Sagara Kariawasam says there were many sensitive audit reports due, including the one on the release of over 300 containers from the Colombo Port, and alleged that the government is dragging the AG appointment till January, when the term of the three civil society members on the Constitutional Councils comes to an end. “Once the new appointments are made, the government will have a majority and will be able to have any nominee of their choice approved by the Constitutional Council,” he said.


The failure by the President to nominate someone from the Audit Service to the top post has led to allegations questioning the government’s motives and its commitment to accountability and transparency.

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