The Asian Development Bank (ADB) has retained Sri Lanka's economic growth forecast for 2026 at 3.2%, according to its latest Asian Development Outlook report released in July 2026. The forecast remains unchanged from the previous projection made in April 2026.
The ADB noted that Sri Lanka's economy is benefiting from ongoing reforms under the International Monetary Fund (IMF) program, including fiscal consolidation and structural adjustments. The tourism sector continues to recover, with visitor arrivals surpassing pre-pandemic levels in early 2026.
However, the ADB cautioned that risks remain, including potential delays in debt restructuring negotiations and external economic uncertainties. Inflation has moderated but remains elevated, and the central bank has maintained a cautious monetary policy stance.
The report also highlighted that Sri Lanka's GDP grew by 4.5% in 2025, exceeding earlier expectations, driven by a rebound in services and industrial production. The ADB expects growth to stabilize around 3-4% over the medium term, contingent on continued reform implementation and improved investor confidence.
