Fitch Ratings says the Sri Lankan economy is showing signs of stabilising after the 2022–2023 contraction, recording 5% growth in 2024 and 4.8% growth in the first half of 2025.
Growth in 1H25 was driven by industry and services, which expanded 7.9% and 3.3% year-on-year, respectively.
“US tariffs will be a growth headwind, but the revised reciprocal tariff rate of 20% is now in line with peers, reducing risks to exports. We see low average inflation, but to rise gradually to 5% in 2027, in line with the CBSL’s inflation target.”