Sri Lanka Economy Grows 5.1% in Q1 2026

by Zulfick Farzan 15-06-2026 | 4:11 PM

COLOMBO (News 1st); Sri Lanka recorded a strong economic performance in the first quarter of 2026, with Gross Domestic Product (GDP) growing by 5.1 percent.

According to the Department of Census and Statistics, Sri Lanka’s GDP at constant prices rose to Rs. 3,652,503 million in the first quarter of 2026, compared to Rs. 3,476,664 million recorded during the same period in 2025.

At current prices, GDP reached Rs. 9,164,652 million, reflecting an 11 percent increase compared to the previous year, further underscoring the expanding scale of the economy.

The growth was driven by contributions from all three major sectors of the economy, with industry emerging as the strongest performer. Industrial activities expanded by 7.2 percent, supported by robust gains in construction and mining, as well as steady improvements in manufacturing. Construction activity, in particular, saw significant

The services sector, which remains the largest contributor to Sri Lanka’s economy, recorded a 3.4 percent expansion, with notable growth in financial services, insurance, information technology, and tourism-related activities. Increased economic activity and improved domestic demand played a key role in supporting the sector’s performance.

Agriculture, although showing more modest gains, also returned to positive territory with a 1.1 percent expansion, reversing a contraction recorded during the same period last year. Growth in certain crop segments helped offset declines in fisheries and some plantation crops.

The first quarter performance came amid ongoing recovery from external shocks, including the impact of Cyclone Ditwah and emerging global pressures toward the end of the period, particularly geopolitical tensions in the Gulf region.

Despite these factors, the economy managed to sustain growth, supported by increased imports of capital and intermediate goods, which facilitated production and boosted government revenue.

Rising import volumes, particularly for construction and transport-related activities, played a crucial role in sustaining momentum, while improved financial conditions and lower interest rates helped stimulate growth in sectors such as insurance and banking.