Sri Lanka economy maintains growth momentum

Sri Lanka’s economy maintained its growth trajectory in the first quarter of 2026, with agriculture, industry and services sectors recording broad-based expansion, while improved fiscal indicators and rising stock market indices underscored strengthening economic conditions, according to the latest weekly highlights released by the Central Bank of Sri Lanka (CBSL).

The economy expanded by 5.1 per cent in the first quarter of 2026, following a 4.7 per cent growth recorded in the corresponding period of 2025. Agriculture grew by 1.1 per cent, industry by 7.2 per cent and services by 3.4 per cent. Taxes less subsidies on products increased by 14.8 per cent.

The CBSL noted that Purchasing Managers’ Indices (PMI) for May signalled continued expansion in both manufacturing and services activities. In the monetary sector, the Weekly Average Weighted Prime Lending Rate rose by 17 basis points to 10.42 per cent for the week ending June 19, while the Average Weighted Call Money Rate edged up to 9.22 per cent. Excess liquidity in the domestic money market stood at Rs. 31.25 billion by June 19.

Investor sentiment remained positive, with the All-Share Price Index gaining 3.35 per cent to 22,361.31 points and the S&P SL20 Index advancing 3.12 per cent to 6,215.30 points during the week. Government finances also showed improvement. Revenue and grants increased to Rs. 1,958.3 billion during the first four months of 2026, while the overall budget balance recorded a surplus of Rs. 105 billion compared with a deficit of Rs. 261.6 billion a year earlier.

Meanwhile, the rupee has depreciated by 7.3 per cent against the US dollar so far this year. Tourism earnings amounted to US$155.7 million in May, compared with US$164.3 million in April and US$164.1 million in May 2025.

Global crude oil prices declined during the week amid easing supply concerns and hopes for a durable ceasefire between Iran and Israel.

Source: Daily News