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The Economy of Sri Lanka

Sri Lankan Economy

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Economy - overview: In 1977, Colombo abandoned statist economic policies and its import substitution trade policy for more market-oriented policies, export-oriented trade, and encouragement of foreign investment. Recent changes in government, however, have brought some policy reversals. Currently, the ruling Sri Lanka Freedom Party has a more statist economic approach, which seeks to reduce poverty by steering investment to disadvantaged areas, developing small and medium enterprises, promoting agriculture, and expanding the already enormous civil service. The government has halted privatizations. Although suffering a brutal civil war that began in 1983, Sri Lanka saw GDP growth average 4.5% in the last 10 years with the exception of a recession in 2001. In late December 2004, a major tsunami took about 31,000 lives, left more than 6,300 missing and 443,000 displaced, and destroyed an estimated $1.5 billion worth of property. Government spending on development and fighting the LTTE drove growth to about 6% per year in 2006-08, but high government spending and high oil and commodity prices also pushed inflation past 20% in 2008. Sri Lanka's most dynamic sectors now are food processing, textiles and apparel, food and beverages, port construction, telecommunications, and insurance and banking. In 2008, plantation crops made up only about 20% of exports (compared with more than 90% in 1970), while textiles and garments accounted for more than 40%. About 1.5 million Sri Lankans work abroad, 90% of them in the Middle East. They send home more than $2.5 billion a year. The 25-year civil conflict between LTTE and the government of Sri Lanka has been a serious impediment to economic activities. By mid February 2009, the LTTE remained in control of small and shrinking area in the North. The conflict continues to cast a shadow over the economy.

GDP:

GDP - real growth rate: 6% (2008 est.) 6.8% (2007 est.) 7.7% (2006 est.)

GDP - per capita:

GDP - composition by sector: agriculture: 15.5% industry: 27% services: 57.5% (2008 est.)

Population below poverty line:

Household income or consumption by percentage share: lowest 10%: 1.1% highest 10%: 39.7% (2004)

Distribution of family income - Gini index: 49 (2007)

Inflation rate (consumer prices):

Labor force: 7.588 million note: excludes northern and eastern provinces (2008 est.)

Labor force - by occupation: agriculture: 34.7% industry: 26.1% services: 39.2% (30 September 2008 est.)

Unemployment rate: 5.2% (30 September 2008 est.)

Budget: revenues: $7.8 billion expenditures: $11 billion (2009 est.)

Industries: processing of rubber, tea, coconuts, tobacco and other agricultural commodities; telecommunications, insurance, banking; clothing, textiles; cement, petroleum refining, information technology services

Industrial production growth rate: 6.2% (2008 est.)

Electricity - production: 9.814 billion kWh (2007 est.)

Electricity - production by source:

Electricity - consumption: 8.276 billion kWh (2007 est.)

Electricity - exports: 0 kWh (2008 est.)

Electricity - imports: 0 kWh (2008 est.)

Oil - production: 0 bbl/day (2008 est.)

Oil - consumption: 86,030 bbl/day (2006 est.)

Oil - exports: 291.9 bbl/day (2005)

Oil - imports: 87,090 bbl/day (2005)

Oil - proved reserves: 0 bbl (1 January 2008 est.)

Natural gas - production: 0 cu m (2008 est.)

Natural gas - consumption: 0 cu m (2008 est.)

Natural gas - exports: 0 cu m (2008 est.)

Natural gas - imports:

Natural gas - proved reserves: 0 cu m (1 January 2008 est.)

Agriculture - products: rice, sugarcane, grains, pulses, oilseed, spices, tea, rubber, coconuts; milk, eggs, hides, beef; fish

Exports: $8.1 billion f.o.b. (2008 est.)

Exports - commodities: textiles and apparel, tea and spices; diamonds, emeralds, rubies; coconut products, rubber manufactures, fish

Exports - partners: US 25.5%, UK 13.2%, India 6.7%, Germany 5.7%, Italy 5.1% (2007)

Imports: $14.05 billion f.o.b. (2008 est.)

Imports - commodities: textile fabrics, mineral products, petroleum, foodstuffs, machinery and transportation equipment

Imports - partners: India 23.1%, Singapore 9.9%, China 8.2%, Iran 7.5%, Hong Kong 6.4% (2007)

Debt - external: $12.99 billion (31 December 2008 est.)

Economic aid - recipient:

Currency:

Currency code:

Exchange rates: Sri Lankan rupees (LKR) per US dollar - 108.33 (2008), 110.78 (2007), 103.99 (2006), 100.498 (2005), 101.194 (2004)

Fiscal year: