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Economy of Sri Lanka
 
 
 

General

According to the International Monetary Fund, Sri Lanka has a yearly gross domestic output of $59 billion as of 2010. It has a GDP of $116 billion in terms of purchasing power parity. Sri Lanka is next only to Maldives in the South Asian region in terms of per capita income, with a nominal value of $2,877 and PPP value of $5,673. It recorded a GDP growth of 8.3% in 2011.

In the 19th and 20th centuries, Sri Lanka became a plantation economy, famous for its production and export of cinnamon, rubber and Ceylon tea, which remains a trademark national export. The development of modern ports under British rule raised the strategic importance of the island as a centre of trade. From 1948 to 1977 socialism strongly influenced the government's economic policies. Colonial plantations were dismantled, industries were nationalised and a welfare state established. In 1977 the free market economy was introduced to the country, incorporating privatisation, deregulation and the promotion of private enterprise.

While the production and export of tea, rubber, coffee, sugar and other commodities remain important, industrialisation has increased the importance of food processing, textiles, telecommunications and finance. Main economic sectors of the country are tourism, tea export, clothing, rice production and other agricultural products. In addition to these economic sectors, overseas employment contributes highly in foreign exchange, most of them from the Middle East. As of 2010, the service sector makes up 60% of GDP, the industrial sector 28% and the agriculture sector 12%. The private sector accounts for 85% of the economy. India is the largest trading partner of Sri Lanka. Economic disparities exist between the provinces, with Western province contributing to 45.1% of the GDP, Southern province and Central province, 10.7% and 10% respectively. With the end of the war, Northern province reported a record 22.9% GDP growth in 2010.

The per capita income of Sri Lanka has doubled since 2005. During the same period, poverty has dropped from 15.2% to 7.6%, unemployment has dropped from 7.2% to 4.9%, market capitalisation of CSE has quadrupled and budget deficit has doubled. 90% of the households in Sri Lanka are electrified, 87.3% of the population have access to safe drinking water and 39% have access to pipe-borne water.

The Global Competitiveness Report published by the World Economic Forum has listed Sri Lanka as a transitive economy, from factor-driven stage to efficiency-driven stage, ranking 52nd in the global competitiveness. It also ranked 45th in health and primary education, 32nd in business sophistication, 42nd in innovation and 41st in goods market efficiency out of the 142 countries surveyed. Sri Lanka ranks 8th in the World Giving Index, registering high levels of contentment and charitable behaviour in its society. In 2010, The New York Times placed Sri Lanka at number 1 position in 31 places to visit. Dow Jones classified Sri Lanka as an emerging market in 2010, and Citigroup classified it as a 3G country in February 2011. Sri Lanka ranks well above other South Asian countries in Human Development Index (HDI) with 0.696 points.

Overview

Economy - overview : Sri Lanka continues to experience strong economic growth following the end of the 26-year conflict with the Liberation Tigers of Tamil Ellam (LTTE). The government has been pursuing large-scale reconstruction and development projects supplemented with private investment in its efforts to spur growth in war-torn and disadvantaged areas, develop small and medium enterprises and increase agricultural productivity. The government's high debt payments and bloated civil service have contributed to historically high budget deficits, but economic reforms in recent years in line with IMF recommendations have helped bring down the government's fiscal deficit. The 2008-09 global financial crisis and recession exposed Sri Lanka's economic vulnerabilities and nearly caused a balance of payments crisis. Growth slowed to 3.5% in 2009. Economic activity rebounded strongly with the end of the war and an IMF agreement, resulting in three straight years of high growth in 2010-12. Per capita income of $6,100 on a purchasing power parity basis is among the highest in the region.
GDP (purchasing power parity) : $126.2 billion (2012 est.)
GDP (official exchange rate) : $59.77 billion (2012 est.)
GDP - real growth rate : 6.8% (2012 est.)
GDP - per capita (PPP) : $6,100 (2012 est.)
GDP - composition by sector : agriculture: 12%
industry: 30.1%
services: 57.9% (2012 est.)
Labour force : 8.194 million (2012 est.)
Labour force - by occupation : agriculture: 31.8%
industry: 25.8%
services: 42.4% (June 2012)
Unemployment rate : 5.1% (2012 est.)
Population below poverty line : 8.9% (2010 est.)
Household income or consumption by percentage share
: lowest 10%: 1.7%
highest 10%: 36.8% (2009)
Distribution of family income - Gini index : 49 (2010)
Investment (gross fixed) : 27.7% of GDP (2012 est.)
Budget : revenues: $8.234 billion
expenditures: $12.39 billion (2012 est.)
Taxes and other revenues
: 13.8% of GDP (2012 est.)
Budget surplus (+) or deficit (-)
: -6.9% of GDP (2012 est.)
Public debt
: 79% of GDP (2012 est.)
note: covers central government debt, and excludes debt instruments directly owned by government entities other than the treasury (e.g. commercial bank borrowings of a government corporation); the data includes treasury debt held by foreign entities as well as intra-governmental debt; intra-governmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement; sub-national entities are usually not permitted to sell debt instruments
Inflation rate (consumer prices)
: 9.5% (November 2012)
Central bank discount rate
: 7.5% (19 December 2012 est.)
Commercial bank prime lending rate : 11.5% (31 December 2012 est.)
Stock of narrow money : $3.834 billion (31 December 2012 est.)
Stock of broad money : $21.89 billion (31 December 2011 est.)
Stock of domestic credit : $24.42 billion (31 December 2012 est.)
Market value of publicly traded shares : $19.44 billion (31 December 2011)
Agriculture - products : rice, sugar cane, grains, pulses, oilseed, spices, vegetables, fruit, tea, rubber, coconuts; milk, eggs, hides, beef; fish
Industries : processing of rubber, tea, coconuts, tobacco and other agricultural commodities; telecommunications, insurance, banking; tourism, shipping; clothing, textiles; cement, petroleum refining, information technology services, construction
Industrial production growth rate : 8.4% (2012 est.)
Electricity - production : 10.71 billion kWh (2010 est.)
Electricity - consumption : 9.268 billion kWh (2010 est.)
Electricity - exports : 0 kWh (2012 est.)
Electricity - imports : 0 kWh (2012 est.)
Crude Oil - production : 0 bbl/day (2012 est.)
Crude Oil - exports : 0 bbl/day (2012 est.)
Oil - imports : 41,000 bbl/day (2012 est.)
Oil - proved reserves : 0 bbl (1 January 2012 est.)
Refined petroleum products - production : 50,000 bbl/day (2012 est.)
Refined petroleum products - consumption : 89,620 bbl/day (2011 est.)
Refined petroleum products - exports : 0 bbl/day (2008 est.)
Refined petroleum products - imports : 48,140 bbl/day (2012 est.)
Natural gas - production : 0 cu m (2012 est.)
Natural gas - consumption : 0 cu m (2012 est.)
Natural gas - exports : 0 cu m (2012 est.)
Natural gas - imports : 0 cu m (2012 est.)
Natural gas - proved reserves : 0 cu m (1 January 2012 est.)
Current account balance : -$4.737 billion (2012 est.)
Exports : $10.51 billion (2012 est.)
Exports - commodities : textiles and apparel, tea and spices; rubber manufactures; precious stones; coconut products, fish
Exports - partners : US 19.8%, UK 9.2%, India 6.5%, Italy 5%, Germany 5%, Belgium 4.4% (2011)
Imports : $19.76 billion (2012 est.)
Imports - commodities : petroleum, textiles, machinery and transportation equipment, building materials, mineral products, foodstuffs
Imports - partners : India 25.6%, China 15.9%, Singapore 7.1%, Iran 6.2%, Japan 5% (2011)
Reserves of foreign exchange and gold : $7.4 billion (31 December 2012 est.)
Debt - external : $22.82 billion (31 December 2012 est.)
Stock of direct foreign investment - at home : $NA
Stock of direct foreign investment - abroad : $NA
Exchange rates : Sri Lankan rupees (LKR) per US dollar - 127.3 (2012 est.); 110.57 (2011 est.); 113.06 (2010 est.); 114.95 (2009); 108.33 (2008)
Fiscal year : calendar year
 

 
 

 



 


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