Sri Lanka’s economy recorded a 5.0% growth in 2024, marking a recovery from contractions in the previous two years, according to the latest National Accounts Estimates released by the Department of Census and Statistics (DCS).

The country’s Gross Domestic Product (GDP) at constant prices increased to Rs. 12,472 billion from Rs. 11,878 billion in 2023, while GDP at current prices rose by 9% to Rs. 29,899 billion. The expansion was driven by strong performances in the industrial sector, which grew by 11%, and the services sector, which rose by 2.4%. Agriculture, however, saw a modest increase of 1.2%.

The industrial sector’s growth was fueled by a 19.4% surge in construction activities and a similar expansion in mining and quarrying. The manufacturing sector also rebounded, with key industries such as textiles, metal production, and chemicals showing positive trends.

Meanwhile, the services sector benefited from a significant 31.4% boost in accommodation, food, and beverage activities, reflecting increased tourism activity. IT and telecommunications also contributed to the sector’s expansion, although insurance and pension funding saw a decline of 14%.

The economy continued its positive momentum in the fourth quarter of 2024, growing by 5.4% compared to 4.3% in the same quarter of 2023. Industrial activities led the way with a 13.1% increase, while services grew by 2.5%. However, agricultural activities contracted by 2.2% during the quarter.

The report also highlighted improving economic conditions, including stabilizing inflation, increased vehicle registrations, and higher credit growth following interest rate reductions. The external value of the Sri Lankan rupee showed further stability towards the end of the year.

The DCS noted that Sri Lanka’s recovery, driven by improvements in trade, construction, and services, indicates a shift toward economic stability and potential for sustained growth in the coming years.