Sri Lanka’s economic growth would slow to 4.0 percent in 2026, down from 5 percent last year, but there could be a bigger hit if the conflict in the Middle East continues, Asian Development Bank has said.
A prolonged conflict could reduce growth by 0.5 percent to 0.8 percent in 2026, ADB Senior Country Economist, Lilia Aleksanyan, told reporters in Colombo Friday
Lower tourism revenues, higher energy and fertilizer import costs could be among negative fallouts.
Remittances were currently stable but could also be affected.
The conflict could also add 3.0 percent to 5.0 percent to inflation of 5.2 percent projected in a country outlook report.