📈 Sri Lanka Economy Grows 5.1% in Q1 2026 amid External Challenges

Sri Lanka’s economy demonstrated strong resilience in Q1 2026, posting a real GDP growth rate of 5.1% despite the impacts of Cyclone Ditwah and Gulf geopolitical tensions. According to provisional data from the Department of Census and Statistics, real GDP reached Rs. 3.65 Tn (constant 2015 prices), while current price GDP rose 11.0% to Rs. 9.16 Tn. • Overall Sector Composition: The services sector remains the largest economic pillar at 54.2% of GDP, followed by industrial activities at 27.2% and agriculture at 7.3%. Taxes less subsidies made up the remaining 11.3%. • Industrial Activities (Primary Driver): The sector expanded by 7.2%, heavily fueled by a 16.3% surge in construction and a 19.5% jump in mining and quarrying. Manufacturing grew 2.8%, led by a 22.8% increase in chemical and pharmaceutical products. • Services Activities: Grew by 3.4% overall. Top performers included insurance and pension funding (+22.0%), ICT/BPM (IT programming and consultancy up 16.1%), and financial services (+12.8%), which capitalized on a lower interest rate environment. • Agricultural Activities: Recorded a modest 1.1% turnaround expansion (reversing a 1.3% decline in Q1 2025). While oleaginous fruits surged 64.8%, overall sector growth was heavily dragged down by sharp contractions in freshwater fishing (-37.8%) and marine fishing (-25.7%).