Leftist outsider Dissanayake wins Sri Lanka election

Good morning. In today’s news:

But first, Anura Kumara Dissanayake, a neo-Marxist outsider candidate, has won the Sri Lankan presidency.

The 55-year-old leftist beat incumbent President Ranil Wickremesinghe, who took power in 2022 after the country defaulted on its foreign debt and its leader Gotabaya Rajapaksa fled, and the main opposition leader Sajith Premadasa, son of a former president.

Dissanayake’s victory is the nation’s biggest political upset since independence from Britain and throws fresh doubt on its fragile IMF-backed debt restructuring. In a statement on social media, Dissanayake, widely known by his initials AKD, promised “a fresh start”.

He has pledged to continue with Sri Lanka’s $3bn IMF loan agreement, but alter some rigid conditions to grant more relief to the country’s 23mn people, about a quarter of whom are in poverty after two years of crisis and austerity. 

In his campaign, Dissanayake vowed to end corruption and rid public life of scandal, while slashing the privileges of the ruling class such as generous pensions and car permits.

Analysts said the outcome was a stunning result for a bloc with just three MPs in a parliament dominated by parties supported by legacy elites. Here’s what to know about Sri Lanka’s next president.

And here’s what else I’m keeping tabs on today:

• Economic data: Singapore and Malaysia publish consumer price inflation data for August. Labour market data is due from Taiwan.

• Japan: Financial markets are closed for Autumn Equinox Day.

What lies ahead for India after the first 100 days of Prime Minister Narendra Modi’s third term? Join FT, Nikkei Asia and Asia Society experts for a webinar on October 10 and put your questions to our panel now. Register for free. 

Five more top stories

1. Chinese electric-car maker BYD’s expected expansion into Pakistan has raised hopes in the country that the company can help jump-start exports in the automotive manufacturing sector. For BYD, a planned EV assembly plant in Pakistan would mark the company’s first venture into south Asia after being blocked in India by Prime Minister Narendra Modi’s government.

2. European steelmakers have pleaded with trade officials to tackle a surge in Chinese steel exports that has driven European prices below the cost of production. A new, comprehensive system of tariffs is needed to address the market-distorting effects of global overcapacity, producers and Europe’s main trade body told the FT.

3. The US warned Israel against opening a full-blown war with Hizbollah yesterday as the Lebanese militant group and Israeli forces engaged in some of their fiercest exchanges of fire since October 7. Here’s the latest.

4. Germany’s Social Democrats were on course for a narrow victory over the far-right Alternative for Germany in elections in the eastern state of Brandenburg. The projected result is an unexpected reprieve for Olaf Scholz as he prepares to run for a second term as chancellor next year.

5. US banks made a $1tn windfall from the Federal Reserve’s two-and-a-half-year era of high interest rates, an analysis of official data by the FT has found. Lenders got higher yields for their deposits at the Fed but kept rates lower for many savers, the review of Federal Deposit Insurance Corporation data showed. The boost to the US’s more than 4,000 banks has helped pad out profit margins.

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Chart of the day

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Take a break from the news

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Additional contributions from Gordon Smith