Sri Lanka’s economy grew by 4.2 percent in the second quarter of 2026, with strong performances in industrial activities helping offset a contraction in agriculture and slower growth in the services sector, according to the Department of Census and Statistics (DCS).
The DCS said the country’s gross domestic product (GDP) at constant 2015 prices increased to Rs. 3.03 trillion in the April-June quarter of 2026, from Rs. 2.91 trillion in the corresponding quarter of 2025.
GDP at current prices rose by 11.3 percent to Rs. 8.25 trillion, compared with Rs. 7.41 trillion recorded in the second quarter of 2025.
Industrial activity emerged as the main driver of growth, expanding 7.3 percent, compared with 5.7 percent growth recorded during the same quarter last year. Construction and mining and quarrying recorded particularly strong performances, growing by 13.9 percent and 17.4 percent, respectively.
Meanwhile, manufacturing activity expanded by 3.2 percent, supported by higher production of wood and wood products, non-metallic mineral products, furniture, machinery and equipment, and basic metal and fabricated metal products.
However, several manufacturing industries recorded declines, including the production of coke and refined petroleum products, rubber and plastic products, and textiles, wearing apparel, leather and related products.
The services sector grew by 2.7 percent during the quarter, slowing from the 4.0 percent expansion recorded in the second quarter of 2025, according to the Department of Census and Statistics.
Information technology-related activities recorded the strongest growth within the services sector, expanding by 10.0 percent, while insurance, financial services and telecommunications grew by 8.0 percent, 7.7 percent and 4.8 percent, respectively.
Accommodation, food and beverage services grew by 2.9 percent, while transport and warehousing expanded by 3.1 percent. Public administration and defence was the only major services sub-sector to record a contraction, declining by 2.4 percent, the DCS noted.
Agricultural activity, meanwhile, contracted by 2.3 percent, compared with 2.5 percent growth in the same quarter of 2025.
The DCS attributed the decline largely to sharp contractions in freshwater fishing and freshwater aquaculture, rice cultivation, sugar cane and tobacco cultivation, marine fishing and aquaculture, and plant propagation.
Freshwater fishing and freshwater aquaculture recorded the steepest decline at 61.0 percent, while rice cultivation fell by 15.1 percent and sugar cane and tobacco cultivation declined by 14.7 percent.
The agricultural contraction was partly offset by growth in forestry and logging, spices, oleaginous fruits, cereals, fruits and animal production.
The DCS said the second quarter began amid an uncertain global economic environment, particularly due to escalating tensions in the Middle East and concerns over crude oil supplies. The effects were also felt through subdued tourism activity.
At the same time, increased import volumes supported the availability of raw materials and machinery needed for industrial production and contributed to government revenue through import-related taxes, according to the DCS.
The increased availability of building materials also helped boost construction activity, while supporting growth in mining and quarrying.
At current prices, services accounted for the largest share of Sri Lanka’s GDP in the second quarter, at 52.7 percent, followed by industry at 25.9 percent and agriculture at 8.4 percent. Taxes less subsidies on products accounted for the remaining 13.0 percent.
The DCS said the 4.2 percent growth rate was calculated by comparing real GDP in the second quarter of 2026 with the corresponding quarter of 2025.
