Sri Lanka growth forecast falls to 4.0% for 2026 as the ADB raises inflation estimates amid fuel costs and global instability.
The latest Sri Lanka growth forecast from the Asian Development Bank points to slower expansion and higher inflation in 2026 as Middle East tensions and wider global instability increase economic pressure.
In its latest economic update, the ADB lowered Sri Lanka’s 2026 growth projection to 4.0%, down from the 4.2% estimate issued in April. It also revised the country’s 2027 growth forecast to 4.0%.
The bank raised its inflation outlook at the same time. It now expects inflation to reach 6.0% in 2026, compared with its previous forecast of 5.2%. For 2027, the ADB increased the estimate to 5.2% from 4.0%.
The report also expects growth across South Asia to ease from 6.3% to 6.0%. Rising fuel prices and disruptions to global supply chains are among the main factors behind the regional slowdown.
Sri Lanka remains particularly exposed to these pressures because the country depends heavily on imported fuel. As a result, global energy-price movements could affect domestic inflation, business costs and the pace of economic growth during the next two years.
