Sri Lanka economy grows 4.2% in Q2 2026; agriculture contracts

Sri Lanka’s economy expanded by 4.2% in the second quarter of 2026, with strong growth in industry helping offset a contraction in the agriculture sector, according to the latest estimates released by the Department of Census and Statistics (DCS).

The DCS said Sri Lanka’s Gross Domestic Product (GDP) at constant 2015 prices increased to Rs. 3.03 trillion in the April–June quarter, up from Rs. 2.91 trillion recorded in the corresponding period of 2025.

Agricultural activities declined by 2.3% during the quarter, while industrial activities expanded by 7.3% and services activities grew by 2.7%.

According to the DCS, the agriculture sector was weighed down by declines in rice cultivation, freshwater fishing, marine fishing, sugar cane and tobacco cultivation, tea and rubber production.

Industrial growth was driven by construction, which expanded by 13.9%, and mining and quarrying, which grew by 17.4%. Manufacturing activities also recorded a 3.2% increase during the quarter.

Meanwhile, services sector growth was supported by information technology programming and consultancy activities, insurance and pension funding, financial services, telecommunications, transportation and accommodation and food service activities.

The DCS noted that the quarter was marked by economic uncertainty linked to tensions in the Middle East, subdued tourism performance and weaker agricultural output. However, higher imports of raw materials and machinery supported industrial activity and government revenue through import-related taxes. (Newswire)

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