SL records 5% GDP growth toward economic expansion

Sri Lanka’s Gross Domestic Product (GDP) recorded a 5.0% of positive growth in the year of 2025, reflecting a favorable expansion in the economic performance for the country, according to the recent National Accounts Estimates report released by the Department of Census and Statistics Sri Lanka (DCS).

The country’s GDP at constant prices, increased up to Rs. 13,128,577 million in 2025 from Rs. 12,508,954 million, which was recorded in the year 2024. At current prices, GDP rose to Rs. 32,750,844 million, an 8.8% positive change, the report stated.

The report pointed out that the three major economic activities of the economy, including: Industry, Services, and Agriculture, contributed expansion to the GDP at current prices by 7.8% following all the sub activity expansions in the year 2025, 3.3%, while the Taxes less subsidies on products component contributed 11.6% of share to the GDP growth.

According to the report, the lifting of vehicle import restrictions and the resulting impact on public expectations of a ‘good economy’ drove economic growth, which was primarily supported by financial services, insurance, and wholesale and retail trade, including the repair of motor vehicles.

The economic climate in 2025 was favorable for strong performance, through maintaining entrepreneur-friendly inflation that began rising in early Q3 of 2025, a stabilized exchange rate, and continuously declining interest rates, according to the report.

The industrial sector was supported by strong performances in construction, mining, and manufacturing, while services growth was driven by financial services, insurance, IT, and tourism-related activities.

Furthermore, in the fourth quarter of 2025, the economy grew by 4.8%, with GDP reaching Rs. 3,414,142 million at constant prices. Industrial activities expanded by 7.3% during the quarter, while agriculture and services recorded growth rates of 2.1% and 3.1%, respectively.

The Department noted that improved economic conditions, including easing interest rates, a relatively stable exchange rate, and increased activity in trade and financial services, contributed to the overall expansion in 2025.

Source: The morning