Sri Lanka’s economy grew 5.1% in the first quarter of 2026, an acceleration from 4.7% the previous quarter, the Department of Census and Statistics (DCS) said on Monday — the country’s strongest quarterly read since the post-crisis recovery began.
GDP at constant 2015 prices reached Rs. 3,652,503 million in the January–March quarter, up from Rs. 3,476,664 million a year earlier, the DCS said. At current prices, GDP rose to Rs. 9,164,652 million from Rs. 8,253,485 million in the same quarter of 2025 — an 11.0% increase. The expansion extends a sustained recovery from the 10.6% contraction recorded at the peak of the crisis in Q1 2023.
Industry was the standout driver, growing 7.2% and accounting for 27.2% of total output. Within the sector, mining and quarrying surged 19.5%, construction expanded 16.3%, and manufacturing posted a softer 2.8% rise, EconomyNext reported.
Services grew 3.4% and remain the largest share of the economy at 54.2%. Insurance activities jumped 22.0%, IT and BPM services expanded 16.1%, and financial services rose 12.8%. Agriculture grew 1.1% — a rebound from a 1.3% contraction a year earlier — even as paddy output fell 5.8%. Coconut production grew 64.8%, offsetting contractions in tea and animal production. Taxes less subsidies on products accounted for 11.3% of GDP.
The DCS released the estimate using the production approach alongside other macroeconomic indicators for the first quarter of 2026.
The acceleration comes despite mounting external pressures. Sri Lanka’s current account flipped back into deficit in April for the first time this year, as Ceylon Petroleum Corporation’s monthly crude bill climbed to US$886 million on Hormuz-driven risk premiums, and tourist arrivals for April fell. The CBSL Annual Review put nominal GDP at US$108 billion for 2025, with the central bank’s own recovery estimate at US$109 billion.
