Sri Lanka economy grows 4.2% in Q2 2026 amid agricultural contraction

Sri Lanka’s economy expanded by 4.2% in the second quarter of 2026, according to data from the Department of Census and Statistics. This represents a slowdown from the 5.1% growth rate recorded in the first quarter of the year.

The growth was characterized by a divergence between sectors. The industrial sector expanded by 7.3%, driven largely by construction (up 13.9%) and mining and quarrying (up 17.4%). Manufacturing also saw a 3.2% increase. The services sector grew by 2.7%, supported by information technology, financial services, and telecommunications.

Conversely, the agriculture sector contracted by 2.3%. This decline was attributed to reduced output in rice cultivation, freshwater and marine fishing, sugar cane, tobacco, tea, and rubber production. The Department noted that economic uncertainty, including Middle East tensions and subdued tourism, contributed to the quarterly landscape.