Sri Lanka’s overall economic activity is expected to slow down due to rising production costs in the industrial sector, and challenges faced in the export sector, University of Colombo Professor in Economics Priyanga Dunusinghe said, speaking on Ada Derana’s Big Focus programme held yesterday (22). 

Dunusinghe, speaking on the growth expectations for the year ahead, warned of a potential slowdown in overall economic activity, citing rising production costs in the industrial sector and challenges facing the export sector.

Agreeing with the growth projections made by international ratings agency Fitch Ratings, stated that Sri Lanka’s economic growth rate in 2026 is projected to be lower than the growth recorded in 2025. 

He noted that recent data indicates an around a 30% decline in tourist arrivals this year. He further pointed out that the agricultural sector has been adversely affected by unfavorable weather and climatic conditions.

Highlighting the influence of global economic conditions, he observed that the International Monetary Fund has revised down its global growth forecasts. He added that the global economic slowdown is likely to impact both Sri Lanka’s goods and services exports.

Furthermore, he emphasised that supply chain disruptions involving essential items such as fuel, fertiliser, and electronic components could continue to exert negative pressure on the economy.