Sri Lanka Economy: Inflation & Positive Trajectory
Sri Lanka's economy has exited deflation and shown positive inflation since August 2025, driven by macroeconomic stability and policy reforms. The Central Bank projects 5% economic growth for 2025, but warns of global uncertainties and geopolitical tensions.
Sri Lanka's economy has moved past deflation, with the Central Bank reporting a steady inflationary climb since August 2025. The growth is underpinned by macroeconomic stability and policy reforms. Key factors supporting this growth include high workers' remittances and improved services exports, despite a widening trade deficit. The Central Bank has built foreign reserves through foreign exchange purchases, strengthening buffers and enhancing external sector resilience. The overall growth projection for 2025 stands at 5%. However, the Central Bank warns that global uncertainties, including geopolitical tensions and climate-related risks, pose challenges to the economic outlook.
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