Sri Lanka, June 18 -- Sri Lanka's government has reaffirmed its 5% economic growth target for 2026, despite tighter monetary policy, weaker domestic demand, and rising inflationary pressures.

Deputy Finance Minister Anil Jayantha Fernando said the target remains unchanged following a 5.1% expansion in the March quarter, with the economy valued at about $109 billion.

The Central Bank of Sri Lanka raised its key policy rate by 100 basis points in May to 8.75%, aiming to curb excess demand and contain inflation, amid private sector credit growth of around 27%.

Officials said discussions have been held with development partners on achieving the country's medium-term growth target of 7%. While a temporary slowdown in demand is expected due ...