ADB Forecasts Slower Growth and Higher Inflation for Sri Lanka in 2026

The Asian Development Bank predicts that Sri Lanka's economic growth will moderate to 4.0 percent in 2026, down from 5.0 percent in 2025. Inflation is also expected to rise sharply to 5.2 percent in 2026, contrasting with a negative rate in the previous year. This outlook is primarily influenced by external pressures, including the Middle East conflict and anticipated increases in energy costs, underscoring the need for continued fiscal discipline.