Sri Lanka faces slowdown in tourism arrivals and apparel exports

Sri Lanka is facing economic headwinds in two of its key sectors: tourism and apparel exports. According to the Sri Lanka Tourism Development Authority, tourist arrivals have surpassed 1.7 million for 2026. However, the current pace is approximately 2% behind the levels recorded during the same period in 2025. India remains the dominant source market, accounting for 43% of arrivals in early October and 26% of total arrivals year-to-date.

Simultaneously, the apparel sector is experiencing a decline in revenue. Central Bank of Sri Lanka data shows that apparel exports earned US$434.8 million in August 2026, a 7.4% decrease compared to the previous year. For the first eight months of 2026, total apparel export earnings reached US$3.108 billion, down 6.3% from the US$3.318 billion recorded during the same period in 2025. The textile and apparel segment specifically saw an 8.4% drop in August exports.