Sri Lankan household consumption has recovered to a record Rs. 8.9 trillion while the middle class has shrunk to 57% of households from 62% in 2020, according to a survey released by Boston Consulting Group with the Ceylon Chamber of Commerce as collaborative partner.

The report, The Changing Path to Purchase in Sri Lanka: How Consumers Discover, Select and Transact Today, draws on a nationally representative survey of 2,272 consumers across all nine provinces, conducted by BCG’s Centre for Customer Insight in June and July 2026 alongside focus group discussions. It was presented to editors in Colombo, the Daily Mirror reported.

Recovery without broad relief

Real consumption reached Rs. 8.9 trillion in 2025 at 2015 prices, above the pre-crisis peak of Rs. 8.2 trillion in 2019, growing an average 5.5% a year in 2023-2025 after contracting 0.8% annually between 2019 and 2023. Consumption’s share of real GDP rose to 67%.

But the aggregate rebound masks a downward shift in incomes. BCG estimated around 400,000 households moved into the two lower-income categories, which rose to 39% of households from 34%, while affluent households held at 4%. Under the study’s inflation-adjusted 2026 thresholds, middle-class households earn Rs. 75,000 to Rs. 400,000 a month.

The middle class still accounts for roughly 70% of consumption, and rural Sri Lanka is home to 56% of middle-class households. “Affluence is sitting within the urban-west part of the country and it is rural which is anchoring the middle class,” said BCG India marketing lead Parul Bajaj.

Spending expectations are outrunning incomes: 77% expect household expenditure to rise over the following six months against 38% expecting higher income, with 27% anticipating a decline. Essentials absorbed 58% of expenditure in 2026, up from 53% in 2020, while vehicles, furniture and jewellery were most likely to be postponed.

Loyalty and credit gaps

Brand commitment is eroding. Among staples buyers, those committed to a single brand fell to 6% from 14% in 2020, Daily FT reported. Digital influence rose to 51% from 32%, though word of mouth leads at 66%. Generative AI awareness stood at 55%, with 18% using it.

Credit remains concentrated: 19% of consumers hold credit cards overall against 33% of households earning above Rs. 150,000 monthly, and only 25% of account holders bank digitally. “There is massive headroom to really drive credit, democratise it, and unlock this demand,” said BCG managing director and partner Anshuman Upadhyaya.