📈 SL Growth to Moderate at 3.5% in 2026 – Standard Chartered Report

Standard Chartered Bank’s Global Focus briefing indicates a positive yet moderating economic outlook for Sri Lanka in 2026, driven by policy continuity and stability. • GDP & Growth Outlook: Growth is forecast at 3.5% for 2026, easing from an estimated 4.5% in 2025. This is supported by low inflation, increased govt capital expenditure, and improved private investment. • Sector Drivers & Support: The recovery is underpinned by the tourism sector and strong worker remittances. Key sectors like ICT/BPM and manufacturing benefit from lower interest rates and easing supply-side constraints. • Fiscal & Monetary Indicators: • Inflation: Forecasted at 4.5%. • Interest Rates: Central Bank expected to hold policy rates steady throughout 2026. • Currency: Gradual depreciation expected, with USD/LKR projected at 315 by year-end. • Current Account: Surplus expected to narrow to 1% of GDP (from 1.8% in 2025) due to rising imports. • Risks & Challenges: The outlook faces headwinds from infrastructure damage caused by Cyclone Ditwah, limited fiscal space, and global uncertainty. Continued fiscal consolidation and debt management remain critical for stability. _Source: Standard Chartered Global Focus (Jan 20, 2026)_