Sri Lanka’s economy expanded by 4.9% in the second quarter of 2025, marking the eighth consecutive quarter of positive growth, according to official data.

The growth reflects the country’s steady recovery from its recent economic downturn, supported by favourable conditions that prevailed over the past seven quarters.

Key drivers of expansion included wholesale and retail trade, particularly motor vehicle sales and repairs, along with goods and passenger transport, warehousing, financial services, and insurance.

The lifting of vehicle import restrictions, coupled with relatively lower interest rates, also contributed to stronger activity.

Construction and mining sectors, traditional growth stimulators in the economy, posted notable gains, while manufacturing activities recorded moderate expansion during the quarter.