Sri Lanka’s economy continued its recovery through 2025 with steady growth, sharply narrower fiscal deficits and falling debt, according to the Central Bank’s “Snapshot of the Sri Lankan Economy – 2025,” published in April 2026.
Real GDP expanded 5.0 percent in 2025, matching the 2024 pace. Agriculture grew 1.4 percent, industry 7.8 percent and services 5.3 percent. Nominal GDP rose from Rs. 30.1 trillion to Rs. 32.8 trillion, lifting dollar-denominated GDP from USD 99.6 billion to USD 108.8 billion. Per capita GDP reached USD 5,003.
The fiscal turnaround was the most striking element of the report. The budget deficit fell to 2.3 percent of GDP from 6.8 percent, while the primary surplus rose to 5.4 percent from 2.2 percent. Outstanding central government debt declined to 91.6 percent of GDP from 95.5 percent. Government revenue rose to 16.7 percent of GDP.
Monetary conditions remained accommodative. The Overnight Policy Rate closed the year at 7.75 percent. Market rates continued to ease, with the average weighted prime lending rate at 11.48 percent and the 12-month Treasury bill yield at 8.45 percent.
Private sector credit growth was sharp at 25.2 percent, with new lending of Rs. 2,056 billion — more than double the Rs. 790 billion extended the previous year.
In the external sector, the trade deficit widened to USD 7.9 billion. Workers’ remittances improved 8.1 percent to USD 6.6 billion, while gross official reserves stood at USD 6.1 billion.
The Snapshot distils the granular data behind the Central Bank’s Annual Economic Review, which was formally presented at a ceremony on April 20. Its publication underscores the scale of the turnaround since the 2022 crisis — though gross reserves remain below historical norms and the debt load, while declining, remains at levels the International Monetary Fund continues to monitor under its Extended Fund Facility programme.
