Economy of Sri Lanka

Economy of Sri Lanka
Colombo - 49531939661.jpg
Colombo, the financial centre of Sri Lanka
CurrencySri Lankan rupee (Rs) (LKR) (රු)
Calendar year
Trade organisations
WTO, WCO, SAFTA, IOR-ARC, SCO, BIMSTEC, AIIB and others
Country group
Statistics
PopulationIncrease 21,803,000 (2019)[3]
GDP
  • Decrease $80.7 billion (nominal, 2020 prov.)[4]
  • Increase $84.532 billion (nominal, 2021 est.)[5]
  • Increase $306.997 billion (PPP, 2021 est.)[5]
GDP rank
GDP growth
  • 3.3% (2018) 2.3% (2019)
  • −3.6% [4](2020f) 4% (2021f)[6][7]
GDP per capita
  • Decrease $3,682 (nominal, 2020.)[4]
  • Increase $3,830 (nominal, 2021 est.)[5]
  • Increase $13,909 (PPP, 2021 est.)[5]
GDP per capita rank
GDP by sector
4.2% (2020) [9] 4.8% (2021.f)[5]
Population below poverty line
  • 4.1% (2016)[10]
  • Negative increase 11.3% on less than $3.20/day (2020f)[11]
39.8 medium (2016, World Bank)[12]
Labour force
  • Increase 8,031,233 (2020-4Q)[15]
  • Decrease 50.1% participation rate (2020-4Q)[15]
Labour force by occupation
Unemployment
Main industries
textiles & clothing, tourism, telecommunications, information technology services, banking, shipping, petroleum refining, construction and processing of tea, rubber, coconuts, tobacco and other agricultural commodities
Increase 99th (medium, 2020)[16]
External
ExportsDecrease $12.8 billion (2020)[17]
Export goods
textiles and apparel, tea and spices, electronics, IT services, rubber manufactures, fish, precious stones
Main export partners
ImportsDecrease $15.584 billion (2020)[18]
Import goods
Mineral fuels including petroleum product (12.3%)
Machinery including computers (9%)
Electrical machinery, equipment
Vehicles (7.1%)
Textile fabric (5%)
Plastics (3.7%)
Cotton (3.3%)
Heavy metals (3%)
Ships and boats (2.8%)
Iron, steel, aluminium (2.8%)
Main import partners
FDI stock
  • US$13.05 Billion (2019)[19]
  • Steady Abroad: NA[20]
Positive decrease −$1.08 billion (2020)[4]
Negative increase $51.72 billion (79.1% of GDP) (31 December 2017 est.)[5][20]
Public finances
Negative increase101.0% of GDP (2020)[4][note 1]
−11.1% (of GDP) (2020 prov.)[4]
RevenuesRs1,890bn/US$10.4bn (2019 prov.)[21]
ExpensesRs2,915bn/US$16.0bn (2019 prov.)[21]
Standard & Poor's:[22]
CCC+ (Domestic)
CCC+ (Foreign)
CCC+ (T&C Assessment)
Outlook: Stable
Moody's:[23]
Caa1
Outlook: Stable
Fitch:[24]
CCC
Outlook: None at this level
Foreign reserves
  • Increase $4.476 billion (April 2021 )[25]
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

The free-market economy of Sri Lanka was worth $84 billion by nominal gross domestic product (GDP) in 2019[26] and $296.959 billion by purchasing power parity (PPP).[27] The country had experienced an annual growth of 6.4 percent from 2003 to 2012, well above its regional peers. This growth was driven by the growth of non-tradable sectors, which the World Bank warned to be both unsustainable and unequitable. Growth has slowed since then. In 2019 with an income per capita of 13,620 PPP Dollars[28] or 3,852 (2019) nominal US dollars,[29][30] Sri Lanka was re-classified as a lower middle income nation by the World Bank from a previous upper middle income status.[31]

Sri Lanka has met the Millennium Development Goal (MDG) target of halving extreme poverty and is on track to meet most of the other MDGs, outperforming other South Asian countries. Sri Lanka's poverty head count index was 4.1% by 2016. Since the end of the three-decade-long Sri Lankan Civil War, Sri Lanka has begun focusing on long-term strategic and structural development challenges. It strives to transition to an upper middle income country. Sri Lanka also faces challenges in social inclusion, governance and sustainability.[32]

Services accounted for 58.2% of Sri Lanka's economy in 2019 up from 54.6% in 2010, industry 27.4% up from 26.4% a decade earlier and agriculture 7.4%.[8] Though there is a competitive export agricultural sector, technological advances have been slow to enter the protected domestic sector.[33] Sri Lanka is the largest solid and industrial tyres manufacturing centre in the world and has an apparel sector which is moving up the value chain.[34] But rising trade protection over the past decade has also caused concern over the resurgence of inward looking policies.[35]

In services, ports and airports are helping the country's newfound status as a shipping and aviation hub.[36] Port of Colombo is the largest transshipment hub in South Asia.[37] There is a growing software and information technology sector, which is competitive and is open to global competition.[38] Tourism is a fast expanding area. Lonely Planet named Sri Lanka the best destination to visit in 2019 and Travel+Leisure the best island.[39][40] Sri Lanka's top export destinations are the United States, United Kingdom and India. China, India and the UAE are the main import partners.[41]

With the onset of the COVID-19 pandemic, lingering concerns over Sri Lanka's slowing growth, money printing and government debt has spilled over into a series of sovereign rating downgrades.[42][43] Import controls and import substitution have intensified after heightened monetary instability coming from debt monetization.[44][45][46][47] Sri Lanka has been named among the top 10 countries in the world in its handling of the COVID-19 pandemic.[48]

  1. ^ "World Economic Outlook Database, April 2019". IMF.org. International Monetary Fund. Retrieved 29 September 2019.
  2. ^ "World Bank Country and Lending Groups". datahelpdesk.worldbank.org. World Bank. Retrieved 1 July 2020.
  3. ^ "Mid-year population projection" (PDF). Retrieved 30 October 2018.
  4. ^ a b c d e f "Key Economic Indicators" (PDF). cbsl.gov.lk. Central Bank of Sri Lanka. Retrieved 28 May 2021.
  5. ^ a b c d e f "World Economic Outlook Database, April 2021". IMF.org. International Monetary Fund. Retrieved 10 April 2021.
  6. ^ "Global Economic Prospects, June 2020". openknowledge.worldbank.org. World Bank. p. 98. Retrieved 24 June 2020.
  7. ^ "World Economic Outlook, October 2020". openknowledge.worldbank.org. World Bank. p. 145. Retrieved 25 November 2020.
  8. ^ a b "Sri Lanka annual GDP at current prices and GDP shares". www.census.gov.lk. Department of Census and Statistics. Retrieved 8 February 2021.
  9. ^ "Monthly CCPI". census.gov.lk. Department of Census and Statitistics. Retrieved 27 February 2021.
  10. ^ "Poverty headcount ratio at national poverty lines (% of population) - Sri Lanka". data.worldbank.org. World Bank. Retrieved 22 January 2020.
  11. ^ "South Asia Economic Focus, Spring 2020 : The Cursed Blessing of Public Banks". openknowledge.worldbank.org. World Bank. p. 107. Retrieved 14 April 2020.
  12. ^ "GINI index (World Bank estimate)". data.worldbank.org. World Bank. Retrieved 16 March 2019.
  13. ^ "Human Development Index (HDI)" (PDF). hdr.undp.org. HDRO (Human Development Report Office) United Nations Development Programme. Retrieved 15 December 2020.
  14. ^ "Inequality-adjusted HDI (IHDI)". hdr.undp.org. UNDP. Retrieved 15 December 2020.
  15. ^ a b c d e "Sri Lanka Labour Force Survey 4th Quarter - 2020". statistics.gov.lk. Department of Census and Statistics. Retrieved 10 May 2021.
  16. ^ "Ease of Doing Business in Sri Lanka". Doingbusiness.org. Retrieved 24 January 2017.
  17. ^ "2020 MARKS A SUCCESSFUL YEAR FOR SRI LANKA EXPORTS". Export Development Board. Retrieved 20 May 2021.
  18. ^ a b c "Expo News, Page No. 08, Major Export Partners of Sri Lanka" (PDF). Retrieved 29 April 2021.
  19. ^ "Sri Lanka FDI slows to US$528mn up to Sept 2020". Economynext. 20 February 2021. Retrieved 21 February 2021.
  20. ^ a b "The World Factbook". CIA.gov. Central Intelligence Agency. Retrieved 16 March 2019.
  21. ^ a b Cite error: The named reference fiscalCB was invoked but never defined (see the help page).
  22. ^ "S&P downgrades Sri Lanka sovereign rating to 'CCC+', over budget, excess liquidity". EconomyNext. Retrieved 12 December 2020.
  23. ^ "Moody's downgrades Sri Lanka's ratings to Caa1, outlook changed to stable". Moodys.com. Moody's. Retrieved 12 December 2020.
  24. ^ "Fitch Ratings Commentary". fitchratings.com. Fitch Ratings. Retrieved 28 November 2020.
  25. ^ EconomyNext https://economynext.com/sri-lanka-forex-reserves-up-us471mn-in-april-after-china-loan-81661. Retrieved 15 February 2021. Missing or empty |title= (help)
  26. ^ "Annual Report 2019". cbsl.gov.lk. Central Bank of Sri Lanka. Retrieved 28 November 2020.
  27. ^ "GDP PPP (current international $) - Sri Lanka". worldbank.org. World Bank. Retrieved 4 December 2020.
  28. ^ "GDP perc apita PPP (current international $) - Sri Lanka". worldbank.org. World Bank. Retrieved 4 December 2020.
  29. ^ "World Bank and Sri Lanka -2019". worldbank.org. World Bank. Retrieved 28 November 2020.
  30. ^ "Enhancing competitiveness in Sri Lanka June 2016" (PDF). World Bank. Retrieved 9 March 2021.
  31. ^ "Sri Lanka downgraded to World Bank lower middle income country as per capita income falls". EconomyNext. Retrieved 28 November 2020.
  32. ^ "Sri Lanka: A Systematic Country Diagnostic". The World Bank. Retrieved 25 April 2016.
  33. ^ "Box Story - Adoption of Modern Technologies in Agriculture - Box Story 04, Central Bank Annual Report 2019" (PDF). www.cbsl.gov.lk. Central Bank of Sri Lanka. Retrieved 8 February 2021.
  34. ^ "Solid Tyres from Sri Lanka". www.srilankabusiness.com. Sri Lanka Export Development Board. Retrieved 8 February 2021.
  35. ^ Athukorale, Prema-chandra. "Sri Lanka's Trade Policy: Reverting to Dirigisme?" (PDF). acde.crawford.anu.edu.au. Crawford School of Public Policy ANU College of Asia and the Pacific. Archived (PDF) from the original on 24 April 2018. Retrieved 8 February 2021.
  36. ^ "The importance of Air Transport to Sri Lanka - IATA". www.iata.org. International Air Transport Association. Retrieved 8 February 2021.
  37. ^ "Sri Lanka's Colombo port could expand to full maritime hub with policy changes". EconomyNext. 20 May 2020. Retrieved 8 February 2021.
  38. ^ "ICT/BPM in Sri Lanka - Asian Development Bank" (PDF). www.adb.org. Asian Development Bank. Archived (PDF) from the original on 22 October 2020. Retrieved 8 February 2021.
  39. ^ "Sri Lanka still Lonely Planet's top destination for 2019". EconomyNext. 2 July 2019. Retrieved 8 February 2021.
  40. ^ "Travel and Leisure readers vote Sri Lanka best island in the world". EconomyNext. 12 July 2019. Retrieved 8 February 2021.
  41. ^ "Central Bank of Sri Lanka 2019 - Statistical Appendix" (PDF). cbsl.gov.lk. Central Bank of Sri Lanka. Retrieved 8 February 2021.
  42. ^ Cite error: The named reference FitchCCC was invoked but never defined (see the help page).
  43. ^ Cite error: The named reference MoodysCaa1 was invoked but never defined (see the help page).
  44. ^ "Sri Lanka import substitution should be temporary: economist". 8 February 2021. 20 October 2020. Retrieved 8 February 2021.
  45. ^ "Sri Lanka import controls extended, license regime in import substitution drive". EconomyNext. 23 May 2020. Retrieved 8 February 2021.
  46. ^ "Money printing to repay debt: Worshipping MMT is likely to magnify economic instability". Dally Mirrro Sri Lanka. 28 December 2021. Retrieved 28 December 2020.
  47. ^ "A child's guide to modern monetary theory: Keynesianism in an old bottle". Colombo Telegraph. 21 December 2021. Retrieved 8 February 2021.
  48. ^ "Sri Lanka tenth best country in handling the Covid-19 pandemic". EconomyNext.com. 28 January 2021. Retrieved 8 February 2021.


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