Sri Lanka, April 10 -- Sri Lanka's recovery is expected to continue at a moderate growth of 3.9 percent in 2025 and 3.4 percent in 2026, following a strong rebound in 2024, the Asian Development Bank (ADB) said in its Asian Development Outlook report released yesterday.

As the uncertainties from the elections and debt restructuring fade, improved investor confidence will support private investment, although consumer demand will remain sluggish amid the expected rising inflation. The downside risks to the growth outlook include trade uncertainty, including the recently announced US tariffs on imports from Sri Lanka, loss of reform momentum and macroeconomic policy slippages.

The growth forecasts were finalised prior to the April 2 announ...