Industrial activity gains momentum, but remains below pre-crisis highs

Sri Lanka's industrial production is gaining further strength, with strong domestic and foreign demand, easing costs, and lower interest fates helping the sector expand continuously and approach its previous highs.

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According to the latest available data, the Index of Industrial Production (IIP) recorded a value of 101.4 for July 2025, a 6.4 percent increase from the same period in 2024. This marks the first time the index has surpassed the 100.0 level since March of this year (when it was 103.9), following a brief slowdown in April typically caused by factory closures for the traditional New Year holidays.

Industrial activity has been steadily recovering since the country’s economic crisis in 2022, after which the index consistently remained below the 100.0 mark until March of this year. Shortages of foreign currency for essential imports, record-high inflation, and soaring interest rates and taxes took a massive toll on all corners of the economy, with the industrial sector being the most affected.