Tuesday Dec 16, 2025
Tuesday Dec 16, 2025
Tuesday, 16 December 2025 02:34 - - {{hitsCtrl.values.hits}}
Sri Lanka’s economy in the third quarter of 2025 has picked up the pace and maintained the upward trajectory for a second consecutive quarter, after losing momentum since 3Q 2024.
The encouraging 3Q 2025 Gross Domestic Product (GDP) growth news is dampened in the wake of the Ditwah-related damages to lives, livelihoods, businesses, and industry.
The Department of Census and Statistics (DCS) yesterday confirmed that the country’s GDP grew by 5.4% in 3Q 2025, up from 4.9% in 2Q, and slightly up in comparison to 5.3% achieved a year ago.
The economy declined since peaking at 5.5% in 3Q 2024 to 5.4% in 4Q 2024, and 4.8% in 1Q 2025.
Another encouraging development is that 3Q 2025 marked a positive growth rate for the ninth consecutive quarter, starting from 3Q 2023.
In the full year of 2024, the economy achieved a complete turnaround, posting 5.5% growth as against a contraction of 2.3% in 2023.
Issuing a communiqué on the release of the National Accounts Estimates, the DCS said agricultural, industrial, and services activities recorded increases of 3.6%, 8.1%, and 3.5%, respectively.
The general price level in the economy began to rise early in 3Q 2025, alongside a largely stable but slightly declining exchange rate against major currencies, which incentivised entrepreneurs and exporters.
Imports and exports remained at elevated levels during 3Q 2025 compared to the corresponding period of the previous year. The expansion of domestic credit, mainly through cooperatives and the private sector, was instrumental in supporting the reported 5.4% growth in Sri Lanka’s economy, the DCS said.
This was further reflected in the growth of financial activities during 3Q 2025. In addition, increased tourist arrivals and a higher supply of investment goods, together with lower-cost imports of intermediate goods, were key contributors to the reported growth in certain manufacturing and construction activities, as well as in services activities, particularly accommodation services and goods and passenger transport services.
Primary economic activities such as agriculture and mining also played a significant role in the reported growth during the quarter. This was further supported by expansions in electricity and water supply and most services activities in 3Q 2025.
The DCS provided the following commentary on sectoral performance:
In 3Q 2025, agricultural activities recorded a 3.6% expansion, compared to the 3.7% growth reported in the same quarter of the previous year. With the exception of two sub-sectors, all other agricultural activities reported growth during the period.
Accordingly, plant propagation (46.6%), growing of oleaginous fruits including coconut (27.1%), growing of sugar cane, tobacco and non-perennial crops (11.2%), growing of cereals (10.3%), agriculture supporting activities (8.8%), animal production (8.4%), forestry and logging (7.4%), growing of vegetables (4.3%), growing of rice (3.6%), growing of coffee, cocoa and other beverage crops (2.4%), growing of fruits (1.5%), growing of spices, aromatic, drug and pharmaceutical crops (0.3%), and marine fishing and marine aquaculture (0.3%) recorded positive growth rates.
Growing of rubber (0.0%) and growing of other perennial crops (0.0%) recorded marginal growth compared to the third quarter of 2024, while fresh water fishing and fresh water aquaculture (-45.0%) and growing of tea (-8.1%) reported contractions.
Industrial activities recorded an 8.1% growth in 3Q 2025, compared to the 10.1% growth reported in the corresponding quarter of the previous year. Within industrial activities, the construction industry and mining and quarrying industry expanded by 12.2% and 17.5%, respectively, contributing significantly to overall growth. Overall manufacturing activities grew by 5.3% during the quarter.
Among manufacturing sub-sectors, manufacture of coke and refined petroleum products (83.1%), manufacture of basic metal and fabricated metal products (22.2%), manufacture of other non-metallic mineral products (7.9%), manufacture of chemical products and basic pharmaceutical products (6.7%), manufacture of paper and paper products (6.3%), manufacture of machinery and equipment (6.0%), manufacture of food, beverages and tobacco products (4.9%), manufacture of textiles, wearing apparel, leather and related products (4.9%), manufacture of rubber and plastic products (2.6%), and manufacture of wood and wood products (0.6%) recorded expansions.
However, manufacture of furniture (-6.0%) and other manufacturing and repair and installation of machinery and equipment (-1.5%) reported contractions. In addition, electricity, gas, steam and air conditioning supply (9.4%), water collection, treatment and supply (14.7%), and sewerage, waste treatment and disposal activities (15.9%) also recorded increases during the quarter.
Services activities recorded a 3.5% growth in 3Q 2025, compared to the 2.6% growth reported in the same quarter of the previous year. With the exception of a 0.9% contraction in public administration and defence, all other services sub-sectors reported positive growth.
The expansion in services was supported by insurance, reinsurance and pension funding (18.0%), financial service activities (13.2%), postal and courier services (10.3%), accommodation, food and beverage serving activities (9.3%), IT programing consultancy and related activities (8.5%), professional services (3.7%), transportation of goods and passengers including warehousing (3.5%), real estate activities and ownership of dwellings (3.5%), human health services (1.9%), wholesale and retail trade (1.8%), programing and broadcasting activities (1.5%), telecommunication (1.5%), other personal services (1.3%), and education (1.3%).
