Sri Lanka’s 2025 Economic Slowdown: A Call for Strategic Reform

Sri Lanka’s economic growth is expected to slow to 3.5% in 2025, down from 5% in 2024, according to the World Bank. This dip follows a year of strong performance driven by tourism and industrial recovery, but ongoing structural issues, global pressures, and trade policy uncertainty threaten to stall progress.

Impact

The slowdown could dampen investor confidence, strain job markets, and delay poverty reduction efforts. Tourism and export sectors, key drivers of the 2024 rebound, may be especially vulnerable without clear trade policies and economic direction.

The Way Forward

To regain momentum, Sri Lanka must:

Clarify trade policies to attract investors and boost exports

Push structural reforms to improve productivity and public sector efficiency.

Invest in skills and innovation to diversify the economy beyond tourism.

With focused reforms, Sri Lanka can turn this slowdown into a stepping stone for more stable, inclusive growth.