Sri Lanka’s economic growth is expected to slow over the next two years, the World Bank said in its latest Global Economic Prospects – January 2026 report.

The World Bank projects Sri Lanka’s real GDP growth to ease to 3.5 percent in 2026 and 3.1 percent in 2027, following an estimated growth of 4.6 percent in 2025. The report attributes the expected slowdown to structural weaknesses in markets, lingering effects of the economic crisis, and weaker external demand driven by global uncertainty.

Despite these challenges, Sri Lanka’s external position has improved, supported by strong remittance inflows and a recovery in tourism, which have helped strengthen foreign reserves and the current account.

The World Bank also forecasts Sri Lanka will continue to record a current account surplus, supported by lower global oil prices and resilient remittances, particularly from Gulf countries.