Wednesday Mar 18, 2026
Wednesday Mar 18, 2026
Wednesday, 18 March 2026 00:28 - - {{hitsCtrl.values.hits}}
The economy achieved a 5% annual growth rate for the second consecutive year in 2025 since contracting by 2.3% in 2023, according to the Department of Census and Statistics.
However, growth had slowed down in the fourth quarter of 2025 at 4.8% down from 5.4% in the third quarter, 4.9% in the second and equal to the 4.8% first quarter growth rate.
Issuing a communiqué on the release of National Accounts Estimates, the Department of Census and Statistics states that the GDP growth rate for the year 2025 has been estimated at 5.0% positive growth. Accordingly, the Gross Domestic Product of Sri Lanka for the year 2025 at constant prices (2015) increased to Rs. 13,128,577 million from Rs. 12,508,954 million recorded in 2024. The following Figure 1 reflects the changes in real GDP levels in the annual GDP series from 2018 to 2025.
In addition, the Gross Domestic Product of Sri Lanka for 2025 at current prices increased to Rs. 32,750,844 million from Rs. 30,095,825 million, registering an 8.8% increase. The three major economic activities of the economy, Agriculture, Industry and Services, contributed to GDP at current prices by 8.4%, 25.4% and 54.6% respectively, while Taxes less subsidies on products contributed 11.6% to GDP in 2025.
All three major economic activities, Agriculture, Industry and Services, expanded by 1.4%, 7.8% and 3.3% respectively in 2025. The economic performance in 2025 reflects the impact of lifting vehicle import restrictions and the subsequent effect on expectations of a stronger economy, particularly through financial services, insurance services, and wholesale and retail trade, including the repair of motor vehicles. The economic climate in 2025 was favourable for solid performance, with inflation rising early in the third quarter alongside a mostly stabilised exchange rate and continuously declining interest rates. Fundamentally, mining and quarrying, construction, and manufacturing were influential in the reported growth in 2025. This was further supported by notable expansions in electricity generation, water supply, and most services activities.
In 2025, overall agricultural activities expanded by 1.4% compared to the 0.6% growth recorded in 2024. The growth in agricultural activities was underpinned by expansions in plant propagation (28.1%), forestry and logging (10.7%), animal production (10.5%), growing of oleaginous fruits including coconuts (8.2%), agricultural supporting activities (5.5%), growing of rice (5.3%), growing of sugar cane and tobacco (4.2%), growing of fruits (1.9%), growing of tea (1.4%), growing of spices (0.3%), and growing of cereals (0.2%). Meanwhile, due to adverse weather conditions during the year, several agricultural activities recorded declines. Marine fishing and marine aquaculture declined by 0.1%, growing of other perennial crops by 5.1%, growing of rubber by 6.0%, growing of vegetables by 7.1%, growing of coffee, cocoa and other beverage crops by 10.1%, and fresh water fishing and aquaculture by 45.3%.
In 2025, overall industrial activities expanded by 7.8% compared to the 11.1% growth recorded in the previous year. Within industrial activities, almost all sub-activities reported expansions. Among the key contributors, construction grew by 9.2% and mining and quarrying by 16.9%.
Meanwhile, the overall manufacturing industry grew by 6.2%, supported by nearly all manufacturing sub-activities, except other manufacturing and repair and installation of machinery and equipment, which declined by 5.8% in 2025. Among manufacturing activities, manufacture of coke and refined petroleum products grew by 16.9%, other non-metallic mineral products by 16.2%, basic metal and fabricated metal products by 15.8%, paper and paper products by 10.5%, textiles, wearing apparel, leather and related products by 8.0%, food, beverages and tobacco products by 5.2%, wood and wood products by 5.0%, furniture by 2.9%, chemical and basic pharmaceutical products by 2.8%, rubber and plastic products by 2.6%, and machinery and equipment by 1.4%.
Electricity, gas, steam and air conditioning supply and water collection, treatment and supply recorded positive growth of 9.2% and 5.7% respectively in 2025, while sewerage, waste treatment and disposal activities increased by 8.1%. In 2025, the overall services sector expanded by 3.3% compared to the 2.4% growth recorded in the previous year.
The expansion in the services sector was primarily driven by insurance, reinsurance and pension funding, which grew by 14.6%, followed by IT programming consultancy and related activities at 12.8%. Accommodation, food and beverage services grew by 12.4%, while financial service activities expanded by 10.6%. Postal and courier services grew by 8.9%, real estate activities and ownership of dwellings by 3.6%, telecommunications by 3.1%, transportation of goods and passengers including warehousing by 3.0%, human health and residential care by 3.0%, professional services by 2.4%, programming and broadcasting by 2.0%, wholesale and retail trade by 1.4%, education by 1.3%, and other personal services by 1.0%. Public administration and defence was the only services activity to contract, declining by 1.3% in 2025.
In the fourth quarter of 2025, real Gross Domestic Product grew by 4.8% compared to 5.6% growth in the same quarter of the previous year. Accordingly, GDP at constant prices (2015) for the fourth quarter increased to Rs. 3,414,142 million from Rs. 3,256,900 million recorded in the fourth quarter of 2024. GDP at current prices increased by 10.0% to Rs. 8,700,316 million from Rs. 7,911,421 million in the corresponding quarter of 2024. During the fourth quarter of 2025, agricultural activities grew by 2.1%, while industry and services recorded growth of 7.3% and 3.1% respectively.
