Sri Lanka’s unemployment rate was 4.0% in the second quarter of 2026, with an estimated 340,240 people out of work, according to the Labour Force Survey quarterly bulletin published by the Department of Census and Statistics.

The rate is up from 3.7% in the first quarter of this year and 3.8% in the second quarter of 2025. The labour force participation rate rose to 50.0%, from 49.2% in the previous quarter.

The burden falls on the young and the educated

The headline rate conceals a sharp distribution. Unemployment among people aged 15 to 24 was 17.8% and among those aged 25 to 29 was 12.1%, against 1.4% for everyone over 30.

It also rises with education rather than falling. The rate was 2.0% among those who had not passed GCE O/Levels, 5.0% at O/Level, and 6.7% among those with GCE A/Levels or above — the group that accounts for 165,361 of the 340,240 unemployed, close to half the total.

Gender compounds both effects. Women’s unemployment was 6.1% against 2.8% for men, and the gap widens at every step up the education ladder: among those with A/Levels or above, the rate was 9.6% for women and 3.9% for men. Among women aged 15 to 24 it was 22.4%.

The bulletin states the pattern is not new, noting that unemployment is “more acute in the case of educated females than educated males,” consistently across previous survey rounds.

Why the quarterly rise should be read cautiously

The rate has moved within a narrow band for more than a year: 3.8% in the second quarter of 2025, 4.3% in the third, 3.8% in the fourth, 3.7% in the first quarter of 2026 and 4.0% now. The department publishes 95% confidence intervals alongside the estimate, and the survey is based on a quarterly sample of 6,250 housing units.

A 0.3-point quarterly move within a series that has oscillated in this range is better read as the labour market holding roughly flat than as a turn. The level, not the quarter’s direction, is what the age and education breakdowns make significant.

What economists point to

Economics Professor at the University of Peradeniya Prof. Wasantha Athukorala told the Daily Mirror that the absence of large-scale public sector recruitment was a factor.

“Every three to four years, graduates are recruited into the public sector in large numbers for positions such as development officers and teachers. However, in recent years, there has been no recruitment of graduates on such a large scale,” he said.

He added that firms were still recovering from the 2022 economic crisis, and that openings created after the Ditwah disaster and amid global tensions had not been enough to absorb the number of people seeking work.

Employment itself rose, to 8,246,216 people. Services accounted for 49.2% of those employed, industry 27.3% and agriculture 23.4%.

Context

The bulletin was released on 30 September; the Daily Mirror’s report, which added the expert comment and interviews with jobseekers, was filed on 5 October.

The figures land alongside a $100 million ADB loan for technical and vocational skills training aimed at the same mismatch between qualifications and available work.

Sources: Department of Census and Statistics, Daily Mirror, Newswire.