Sri Lanka PMI recorded strong expansion in December 2025, signaling robust growth across manufacturing and services. The latest data reflects improved business confidence, steady production, and resilient economic activity despite weather and market disruptions.
Sri Lanka PMI highlights robust growth across manufacturing and services in December
Sri Lanka’s Purchasing Managers’ Index (PMI) data for December 2025 reveals notable expansion in both manufacturing and services sectors. The PMI – Manufacturing index rose to 60.9, demonstrating sustained growth supported by seasonal demand, even as the nation faced early-month weather disruptions. All sub-indices contributed positively, underlining a resilient industrial sector poised for further momentum. The services sector mirrored this optimism, showcasing steady activity levels and stable order books, reflecting a broader economic recovery and ongoing investments driving growth.
The manufacturing sub-sector’s strong performance in December indicates rising production and operational efficiency across key industries. Despite temporary setbacks caused by adverse weather, firms reported higher output levels, increased new orders, and improved supply chain resilience. Construction activity also displayed significant gains in November 2025, with the PMI – Construction index climbing to 66.2. Industry players highlighted the influx of private and government-funded projects, alongside rising employment and procurement levels, signaling optimism in long-term sector prospects.
Despite a month-on-month price increase in December triggered by Cyclone Ditwah, Sri Lanka’s headline inflation, as measured by the Colombo Consumer Price Index (CCPI, 2021=100), remained steady at 2.1% year-on-year. Food inflation held at 3.0%, while non-food inflation edged up slightly to 1.8%, reflecting resilience in consumer markets amid natural disruptions. Analysts point out that the favorable statistical base effect contributed to maintaining headline stability.
Sri Lanka’s external sector demonstrated early signs of recovery, with the current account returning to surplus in November 2025 following two months of deficits. The cumulative surplus for January–November reached US$1,678 million. However, the merchandise trade deficit widened on a year-on-year basis, totaling approximately US$6.9 billion, highlighting ongoing challenges in balancing imports and exports.
The Central Bank of Sri Lanka (CBSL) continues to oversee critical regulatory measures. The suspension of Perpetual Treasuries Limited (PTL) from primary dealer activities has been extended for six months from 5 January 2026, allowing investigations to continue. Similarly, the tenure of Mr. P W D N R Rodrigo, administrator of Nation Lanka Finance PLC, has been prolonged for another six months to ensure ongoing supervision under the Banking (Special Provisions) Act. Additional administrative measures include the closure of the Public Debt Department and the integration of its LankaSecure Division into the Payments and Settlements Department, effective 1 January 2026. Furthermore, financial penalties were imposed on several reporting institutions for non-compliance with the Financial Transactions Reporting Act, reflecting continued vigilance in regulatory enforcement.
Provincial Gross Domestic Product (PGDP) data for 2024 shows the Western Province maintaining the largest contribution to national nominal GDP at 42.4%, driven by strong service and industrial activity. Meanwhile, the North Western and Central Provinces held the second and third highest shares at 11.5% and 10.7%, respectively. Other provinces, including Eastern, Sabaragamuwa, and Uva, also saw incremental increases in their economic contributions, signaling broader regional development.
In response to Cyclone Ditwah and macroeconomic challenges, the IMF Executive Board approved US$206 million in emergency financing under the Rapid Financing Instrument. This immediate support, equivalent to 26% of Sri Lanka’s quota, aims to mitigate urgent needs and strengthen fiscal stability. Analysts suggest that this intervention, combined with steady PMI trends, enhances confidence in the country’s short-term economic resilience.
Sri Lanka’s PMI results for December 2025 highlight a balanced combination of growth drivers and policy support. Manufacturing, construction, and services sectors are expanding, while inflation remains controlled, the external account shows improvement, and emergency IMF support reinforces macroeconomic stability.