Economy

Sri Lanka’s central bank expects economy to grow by 4.5% in 2025

Published

10 months ago

August 16, 2025

Sri Lanka’s economy will grow by 4.5% this year, the central bank said in a monetary policy report on Friday, despite some risks to the island nation’s recovery from U.S. tariffs.

The central bank’s projection is above World Bank estimates of 3.5% growth for this year.

Underpinned by a $2.9 billion International Monetary Fund (IMF) programme, Sri Lanka’s gross domestic product grew by 5% in 2024, rebounding strongly from a severe financial crisis three years ago.

The central bank’s report did highlight some risks to the outlook.

“However, external demand conditions and evolving global economic landscape increase the level of uncertainty associated with growth prospects over the near to medium term,” it said.

Sri Lanka is continuing talks with the U.S. after it imposed 20% tariffs last month, reducing it from 44% in April.

Apparel, Sri Lanka’s second-largest foreign exchange earner, is particularly exposed — the sector exports 40% of its output to the U.S. and brought in $4.8 billion last year. It employs around 300,000 people, most of them women.

Inflation will continue to accelerate and reach the central bank’s target of 5% in mid 2026, the report added.

Sri Lanka’s consumer price index fell 0.3% in July, having tumbled from an inflation peak of 70% in September 2022, mainly due to a reduction of power tariffs and food prices.

The Central Bank of Sri Lanka (CBSL) held its benchmark interest rate unchanged at 7.75% last month after trimming it by 25 basis points in May.

Source – Adaderana

Economy

Sri Lanka Secures US$695 Million IMF Tranche

Published

2 days ago

May 28, 2026

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Sri Lanka has secured another US$695 million from the IMF after the completion of the fifth and sixth reviews of the country’s reform programme.

The IMF says Sri Lanka’s reform performance remains “generally strong” despite global challenges, but warned that the Middle East conflict and Cyclone Ditwah pose risks to economic recovery.

Economy

IMF Says Sri Lanka’s Policy Framework StrongerThan In The Past

Published

3 days ago

May 27, 2026

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IMF mission chief Evan Papageorgiou painted a firmer, more confident picture of Sri Lanka’s economic policy framework as the Fund’s Executive Board prepares to consider the combined Fifth and Sixth Reviews of the country’s Extended Fund Facility (EFF) on Wednesday, 27 May.

“Sri Lanka’s reform program continues to move forward,” Papageorgiou said, stressing that “Sri Lanka’s policy framework today is considerably stronger than in the past.”

The IMF view, voiced at a critical moment for the island’s finances , frames the coming Board decision as a test of whether progress on macro stability, reserve rebuilding and investor confidence will translate into continued financial support.

The Executive Board’s decision could unlock the sixth and seventh tranches of the EFF, together worth about USD 700 million.

IMF mission chief Evan Papageorgiou said that the authorities’ recent progress in restoring macroeconomic stability and rebuilding reserves has been recognised by the public, investors and stakeholders.

Global shocks continue to pose renewed pressures, but the Fund emphasised that a stronger policy stance means Sri Lanka is better placed to navigate them.

Economy

Sri Lanka’s exports surpass US$ 5.7b in first four months of 2026

Published

5 days ago

May 25, 2026

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Sri Lanka’s total exports, comprising both merchandise and services, reached US$ 1,380.93 million in April 2026, recording a year-on-year growth of 6 % compared to April 2025.

According to provisional data released by Sri Lanka Customs, together with estimated figures for Gems & Jewellery and Petroleum Products, merchandise exports in April 2026 increased by 9.87% to US$ 1,063.77 million.

Earnings from services exports were estimated at US$ 317.16 million in April 2026, underscoring the growing importance of the services sector in driving Sri Lanka’s overall export performance.

On a cumulative basis, total exports for the period January to April 2026 are estimated at US$ 5,784.38 million, reflecting a growth of 4.3 % over the corresponding period in 2025.

Overall, the positive export performance recorded during the first four months of 2026 highlights the resilience of Sri Lanka’s external sector. Sustained export earnings, supported by stable merchandise trade and the growing contribution of services exports, indicate a steady and encouraging recovery trajectory for the Sri Lankan economy in 2026.