Sri Lanka’s 2025 Economic Recovery Holds Firm

by Zulfick Farzan 22-04-2026 | 11:17 AM

COLOMBO (News 1st); Sri Lanka’s economy showed continued recovery and improved stability in 2025, according to the Snapshot of the Sri Lankan Economy - 2025, published in April 2026 by the Central Bank of Sri Lanka.

Real GDP growth was recorded at 5.0 per cent in 2024 and remained at 5.0 per cent in 2025. Sectoral growth in 2025 included 1.4 per cent in agriculture, 7.8 per cent in industry, and 5.3 per cent in services.

Nominal GDP increased from Rs. 30.1 trillion in 2024 to Rs. 32.8 trillion in 2025, while GDP in US dollar terms rose from USD 99.6 billion to USD 108.8 billion. Per capita GDP improved to USD 5,003 in 2024, compared to USD 4,546 in 2023.

By the end of 2025, the Overnight Policy Rate stood at 7.75 per cent, with the Standing Deposit Facility Rate at 7.25 per cent and the Standing Lending Facility Rate at 8.25 per cent. Monetary policy remained accommodative during the year.

Market interest rates continued to decline. The average weighted prime lending rate for new loans fell to 11.48 per cent, while the rate on outstanding loans declined to 10.69 per cent. Deposit rates also eased, with the weighted average rate on deposits at 6.78 per cent and the weighted rate on new deposits at 6.29 per cent. The 12‑month Treasury bill yield declined to 8.45 per cent.

In the external sector, the trade deficit widened to USD 7.9 billion.

Workers’ remittances improved to USD 6.6 billion, reflecting an 8.1 per cent increase. Gross official reserves stood at USD 6.1 billion.

Private sector credit expanded significantly, with credit growth of 25.2 per cent in 2025. Credit to the private sector rose by Rs. 2,056 billion, compared to Rs. 790 billion in the previous year.

In the fiscal sector, government revenue increased to 16.7 per cent of GDP in 2025. The budget deficit declined sharply to 2.3 per cent of GDP, down from 6.8 per cent, while the primary surplus improved to 5.4 per cent, compared to 2.2 per cent previously. Outstanding central government debt declined to 91.6 per cent of GDP, from 95.5 per cent.