New Delhi, Aug. 22 -- Sri Lankan economy is slowing down as indicated by declining Velocity of Money. There is convincing evidence higher Velocity of Money is associated with healthy GDP growth in Sri Lanka.

Government's focus on fiscal consolidation has a direct impact on reducing growth.

Despite 5.1 percent GDP growth during the first quarter of 2026, IMF predicts Sri Lanka's GDP growth will remain around 3 percent in 2026 and 2027. Many investors are concerned as to why measures to catalyze post crisis economic recovery are not producing higher economic growth. One of the first economic variables foreign investors look at before investing in a country is "sable and expanding GDP".

Underlying Cause of Slowdown

Government's economic ...