Private Sector Credit Surges by Rs. 258 Bn in March Amid Festive Demand 📈

• Overall Growth: Total outstanding private sector credit reached Rs. 10.7 Tn in 1Q 2026, marking a significant 27.1% YoY increase. March alone saw a month-on-month (M-o-M) jump of Rs. 258.4 Bn (up 2.5%), the second-highest monthly increase in a year. • Sector Breakdown: • Domestic Banking Units (DBUs): Led the growth with a Rs. 259.9 Bn M-o-M increase to Rs. 10.14 Tn (+29.3% YoY). • Offshore Banking Units (OBUs): Slightly declined by Rs. 1.5 Bn to Rs. 556.2 Bn, reflecting a 2.7% YoY contraction. • Public Sector & SOEs: • Government Credit: Net credit to the Government fell by Rs. 11.9 Bn to Rs. 8.13 Tn (-2.7% YoY). • State-Owned Enterprises (SOEs): Lending to public corporations dropped sharply by 5.9% M-o-M to Rs. 411.2 Bn, a deep 31.2% YoY contraction. • Outlook: The Central Bank of Sri Lanka (CBSL) expects private credit momentum to continue due to post-cyclone reconstruction and firming demand. However, potential global demand slowdowns for domestic goods and services—stemming from Middle East geopolitical tensions—may moderate growth later in 2026.