📈 Sri Lanka Economy Grows 4.2% in 2Q 2026; 2027 Budget to Focus on Growth

Sri Lanka’s economy expanded by 4.2% YoY in 2Q 2026, taking 1H 2026 growth to 4.7%. Treasury Secretary Dr. Harshana Suriyapperuma noted the performance remains commendable compared to regional peers like Pakistan and Bangladesh, despite macroeconomic disruptions from Cyclone Ditwah, the Middle East war, and rising oil prices. • Key Growth & Macro Figures: • 2Q 2026 GDP Growth: 4.2% YoY (vs 5.0% in 2Q 2025 and 4.0% in 2Q 2024). • 1H 2026 GDP Growth: 4.7%. • Pressure Points: Escalating global oil prices driving up import costs, impacting fuel/energy supply chains, and straining the LKR/USD exchange rate. • Sector Breakdown & Interventions: • Affected sectors receiving relief packages include agriculture (farmers), fisheries, manufacturing, and services. • Targeted, timely government relief interventions helped maintain positive growth momentum during post-cyclone recovery. • Outlook & 2027 Budget Strategy: • Government priority is maintaining growth into 3Q and 4Q 2026 while securing affordable energy supplies. • The 2027 Budget (slated for presentation in 4Q 2026) will focus on creating a conducive environment for agriculture, fisheries, manufacturing, and services to drive sustainable national growth.