FINANCIAL CHRONICLE – According to the Asian Development Bank (ADB), Sri Lanka’s economic growth is expected to decelerate to 4.0 percent in 2026, a decline from the 5.0 percent growth recorded the previous year. This forecast may worsen if the ongoing conflict in the Middle East persists.
Lilia Aleksanyan, a Senior Country Economist at ADB, indicated during a press briefing in Colombo on Friday that the prolonged conflict could further hinder growth by an estimated 0.5 to 0.8 percentage points in 2026.
The potential repercussions of the conflict include diminished tourism revenues and increased costs for energy and fertilizer imports, which could adversely affect the economy. While remittances are currently stable, they too may face challenges as the situation evolves.
Additionally, the conflict could contribute to an increase of 3.0 to 5.0 percent in inflation, which is projected to reach 5.2 percent, according to the country’s economic outlook report. (Colombo/Apr10/2026)
