📈 Sri Lanka GDP Growth Eases to 4.2% in Q2 2026 Amid Sectoral Mixed Trends

• Overall Growth & Outlook: Sri Lanka’s real GDP expanded by 4.2% YoY in Q2 2026, moderating from 5.1% in Q1 2026. The IMF projects full-year 2026 growth at 3.0%, citing risks from Middle East conflicts, elevated oil prices, and weaker tourism receipts, alongside a projected public debt-to-GDP ratio of ~100.1%. • Sector Performance: • Industry: Strongest growth driver at +7.3% YoY, propelled by construction and mining. • Services: Rose +2.7% YoY, led by ICT/BPM, telecommunications, and financial services, despite slower expansion in tourism-related activities. • Agriculture: Contracted by -2.3% YoY. Rice cultivation fell steeply by -15.1% YoY, while freshwater fishing and aquaculture dropped -61.0% YoY, posing risks to rural employment, food prices, and household incomes. • Economic Context: While the growth slowdown does not signal economic contraction, sustained stability hinges on broadening recovery beyond statistics into real job creation, higher household incomes, export expansion, and improved agricultural productivity.