Industrial activity up, tourism earnings, financial market indicators dip

Sri Lanka’s economy reflected mixed trends across key sectors during the week ending May 15, with industrial activity showing improvement while tourism earnings and financial market indicators recorded declines, according to the latest Weekly Economic Indicators released by the Central Bank of Sri Lanka (CBSL).

In the real sector, the Central Bank said tea production declined year-on-year during the January to March 2026 period, mainly due to reduced production in March caused by extreme dry weather conditions. Rubber production also recorded a year-on-year decline during the same period.

However, industrial activity showed signs of recovery, with the Index of Industrial Production (IIP) increasing by 3.0 per cent in March 2026 to 106.9 compared to March 2025.

The increase was mainly driven by higher output in the manufacture of clothing, which grew by 13.8 per cent, and other non-metallic mineral products, which expanded by 16.6 per cent.

The report also noted that Purchasing Managers’ Indices (PMIs) for April 2026 indicated contractions in both manufacturing and services activities, suggesting a slowdown in business conditions. Global oil prices showed volatility during the review period amid supply disruptions and geopolitical tensions linked to the collapse of US-Iran peace negotiations and attacks on ships in the Strait of Hormuz. By the end of the period, Brent and WTI crude oil prices had risen by US$ 5.66 and US$ 6.79 per barrel, respectively, compared to a week earlier.

In the monetary sector, the Weekly Average Weighted Prime Lending Rate (AWPR) declined by 8 basis points to 9.71 per cent for the week ending May 15. Meanwhile, the Average Weighted Call Money Rate (AWCMR) increased slightly to 7.79 per cent from 7.76 per cent recorded at the end of the previous week.

Reserve money declined during the week, mainly due to lower deposits held by commercial banks with the Central Bank.

Source : Daily News