Sri Lanka Economy - 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.

Definition: This entry briefly describes the type of economy, including the degree of market orientation, the level of economic development, the most important natural resources, and the unique areas of specialization. It also characterizes major economic events and policy changes in the most recent 12 months and may include a statement about one or two key future macroeconomic trends.

Source: CIA World Factbook - Unless otherwise noted, information in this page is accurate as of February 21, 2013