According to data released by the Department of Census and Statistics, Sri Lanka’s economy expanded by 5.5% in the third quarter of 2024, a significant improvement from the 1.2% growth recorded in the same period last year. The increase reflects stabilizing macroeconomic conditions supported by the central bank’s broadly deflationary policies.
The quarterly performance builds on the 4.7% growth recorded in the year’s second quarter. Falling interest rates facilitated an expansion in private credit and a recovery in imports, particularly investment and intermediate goods. The agency noted that higher imports of goods such as textiles, cement, and machinery contributed to notable growth in the apparel and construction industries.
The industrial sector led the recovery with a 10.8% expansion, driven by a 13.5% growth in apparel manufacturing and a 23.8% increase in construction activity. Wood products grew 10.7%, while electricity and gas services saw a 15.2% uptick, highlighting a resurgence in industrial demand.
The services sector grew 2.6%, underpinned by an 18.8% increase in accommodation, food, and beverage services, reflecting a rebound in tourism-related activity. Financial services expanded by 5.1%, while telecommunications grew by 3.6%.
Agriculture registered a modest 3% growth despite an 11.5% decline in coconut production. Gains in tea, which grew 16.3% and rice, which expanded 4.3%, offset this decline.
Despite the third-quarter growth, real GDP remains below pre-crisis levels, reflecting the lingering impact of the 2022 economic crisis. The recovery trajectory underscores the importance of sustained policy measures to foster investment, stimulate exports, and support consumer demand.
The figures highlight the sectors driving Sri Lanka’s recovery and point to the need to continue focusing on structural reforms and macroeconomic stability to maintain growth momentum.