Sri Lanka’s 3Q economic growth accelerates to 5.4%

• September quarter performance brings 9-month expansion to a solid 5% 
• All 3 key economic sectors – agriculture, industry and services – grew by 3.6%, 8.1% and 3.5%, respectively

Sri Lanka’s total economic output measured by gross domestic product (GDP) for the third quarter ended in September 2025 expanded by a robust 5.4 percent, much higher than anyone would have expected or imagined, bringing the first nine-month growth of the economy to a solid 5.0 percent, rising from 4.8 percent in the first half.

According to the national accounts estimates released by the Census and Statistics Department, with a 75-day lag from the end of a quarter, all three key economic sectors – agriculture, industry and services – grew by 3.6 percent, 8.1 percent and 3.5 percent, respectively in the third quarter.

While this was a slight moderation from the 3.7 percent and 10.1 percent growths for the agriculture and industry sectors in the same quarter last year, this was much to do with the higher base effects last year.

The services sector accelerated growth to 3.5 percent, from 2.6 percent in the same quarter last year, mainly due to the financial and insurance sector activities, which grew by a solid 13.9 percent.

The wholesale and retail trade, transportation and storage, accommodation and communication activities taken together grew by 3.2 percent from the same period last year.

These activities, in fact, drove much of the economy too when the economy was coming out of the crisis as remittances rose, tourism earnings improved and demand conditions in the economy recovered.

The manufacturing activities expanded by 5.3 percent.

The biggest highlight of the GDP print was the construction sector, which grew by 12.2 percent in the quarter and 10.5 percent in the nine months.

The stellar performance there is a clear reflection that the construction sector activity is picking up faster.

The 3Q GDP print is also the final one before the floods in the final few days in November, which could shave a little bit of output from the 4Q GDP print.

Hence, the economy is expected to record a growth touch below 5.0 percent for the entire 2025.

The breakdown of the sectoral contribution to the economy showed that the services sector contributed the most or 52.0 percent, industry 27.7 percent, agriculture 7.8 percent and taxes less subsidies on products at 12.6 percent in the third quarter.