1Q-2Q gap reflects seasonal pattern, not loss of momentum, DCS data show

Monday, 21 September 2026 04:01 - - {{hitsCtrl.values.hits}}

Real GDP falls to Rs. 3.03 t in 2Q26, down from estimated Rs. 3.65 t in 1Q, a sequential drop of 17.1%
Same seasonal pattern evident in 2025, when an estimated Rs. 3.48 t in 1Q fell 16.3% to Rs. 2.91 t in 2Q
YoY growth, which nets out seasonality, eases more moderately, from 5.1% in 1Q26 to 4.2% in 2Q26

Sri Lanka’s real Gross Domestic Product (GDP) fell 17.1% between the first and second quarters of 2026, but the drop mirrors a recurring seasonal pattern rather than a genuine loss of economic momentum within the year, according to a Daily FT analysis of Department of Census and Statistics (DCS) data.

Real GDP at constant 2015 prices came in at Rs. 3,029,816 million in 2Q 2026, down from an estimated Rs. 3,652,503 million in 1Q. The 1Q figure is derived by subtracting the DCS’s separately published 2Q figure from the 1H total of Rs. 6,682,319 million, and independently reproduces the 5.1% year-on-year (YoY) growth rate DCS reported for 1Q, confirming the method’s consistency.

The same pattern is evident a year earlier. Real GDP for 1Q 2025 is estimated at Rs. 3,476,664 million, derived on the same basis from the 1H 2025 total of Rs. 6,385,234 million, against Rs. 2,908,570 million recorded in 2Q, a sequential decline of 16.3%.

The similarity in magnitude between the two years, a 17.1% first-to-second-quarter drop in 2026 against 16.3% in 2025, points to seasonality rather than a within-year slowdown. Sri Lanka’s first quarter typically benefits from the Maha harvest season in agriculture and other calendar-related effects that lift output relative to the second quarter.

The DCS’s headline growth figures are reported on a YoY basis for this reason, comparing each quarter against the same quarter a year earlier rather than against the preceding quarter. On that measure, growth eased more moderately across 1H 2026, from 5.1% in 1Q to 4.2% in the second.

The DCS does not publish seasonally adjusted quarterly GDP series, meaning any direct quarter-on-quarter comparison, including the calculation above, reflects both underlying economic activity and the seasonal cycle combined, and should be read alongside the YoY figures rather than in isolation.