Sri Lanka’s Digital Economy Hits Rs. 1.3 Trillion, 4.5% of GDP
▼ Summary
– Sri Lanka’s digital economy reached Rs. 1,342 billion (4.5% of GDP) in 2025, driven by rapid growth in e-commerce and e-services reshaping consumer behavior and business operations.
– E-commerce leads the digital transformation, contributing Rs. 735.2 billion (2.47% of GDP) in 2025 and is forecast to grow 10.8% annually to reach $3.9 billion by 2029.
– E-services, including food delivery and online education, are expanding at 15.7% annually and projected to reach a market volume of $1.9 billion with 6.4 million users by 2029.
– The ICT-BPO sector tripled in firms and doubled its workforce from 2015 to 2020, with export earnings expected to hit $2 billion by 2025 and support 300,000 employees.
– Continued growth in e-commerce and e-services is central to improving service delivery, enhancing efficiency, and promoting inclusive digital development in Sri Lanka.
Sri Lanka’s digital economy has surged to an estimated value of Rs. 1.3 trillion, representing a significant 4.5% of the nation’s gross domestic product. This milestone, highlighted in the Institute of Policy Studies’ latest economic review, underscores how e-commerce and digital services are fundamentally reshaping consumer habits, business models, and the country’s competitive standing on the global stage.
The impressive expansion is credited to a combination of factors, including widespread innovation from online platforms, reduced costs for transactions, and greater public access to information technology. The information and communication technology sector stands as a primary engine for this growth, a trend that gained considerable momentum during the global shift toward digital solutions prompted by the pandemic.
E-commerce sits at the forefront of this transformation, contributing a substantial Rs. 735.2 billion to the economy, which equates to 2.47% of GDP. While card-based online transactions alone reached Rs. 367.8 billion, analysts suggest the total market value is likely double that figure when cash-on-delivery and other payment methods are included. The sector’s future looks exceptionally bright, with projections pointing to an annual growth rate of 10.8%, potentially reaching a market size of $3.9 billion within the next few years. Consumer adoption is accelerating rapidly, with over half of all internet users now making online purchases monthly. Digital advertising plays a crucial role in driving sales, influencing purchase decisions for 58% of users. Fashion items lead online shopping carts, purchased by 43% of buyers, followed by personal care products at 23% and electronics at 22%.
Beyond retail, e-services represent another dynamic and rapidly growing segment. This category encompasses food delivery, online education platforms, telehealth consultations, transport services, and digital government transactions. Forecasts indicate this sector will expand by 15.7% each year, on track to become a $1.9 billion market serving 6.4 million users. User penetration is anticipated to hit 23% of the population, signaling a profound integration of digital services into daily life.
The broader ICT and business process management sector continues its robust expansion. Between 2015 and 2020, the number of firms in this industry tripled while its workforce doubled in size. After generating $850 million in revenue, the sector is now projected to achieve $2 billion in export earnings by 2025, supported by a workforce expected to grow to 300,000 professionals. This vibrant ecosystem is also nurturing a wave of innovation, with the potential to foster over a thousand technology startups and solidify the country’s reputation as an emerging digital hub in the region.
Ultimately, the sustained growth of e-commerce and digital services is seen as vital for driving broader economic progress. These channels are crucial for improving how services are delivered to citizens, boosting operational efficiency for businesses, and ensuring that the benefits of technological advancement reach all segments of society, thereby promoting inclusive development.
(Source: MEA Tech Watch)
