ADB retains Sri Lanka’s growth outlook for 2026

Saturday, 11 July 2026 09:40 - - {{hitsCtrl.values.hits}}

The Asian Development Bank (ADB) has retained Sri Lanka’s growth forecast for 2026 at 4%, as a strong 1Q outturn, led by broad-based growth in industry and services, offsets emerging pressures on the external sector. GDP is revised down from 4.2% to 4% for 2027 given the recent 100 basis point rate hike and its lagged impact on growth. Growth forecasts for Maldives in 2026 and 2027 are unchanged.

The inflation forecast for Sri Lanka in 2026 is revised up to 6%, reflecting cumulative rounds of domestic fuel price increases since February and electricity tariff hikes. The 2027 forecast is also raised, to 5.2%, as cost-recovery pricing reform continues under an International Monetary Fund program.

For 2027, most sub-regional growth projections are unchanged, reflecting expectations of a gradual recovery. Downward revisions are seen in Caucasus and Central and West Asia as well as South Asia, driven by lower forecasts for Armenia, Bangladesh, Nepal, Pakistan, Sri Lanka, and Türkiye partly because of the continued impact of higher energy prices.