Sri Lanka Economy Profile 2009

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 GDP growth to about 7% per year in 2006-07 before the global recession slow growth in 2008, but high government spending and high oil and commodity prices also raised inflation to around 15% 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 (purchasing power parity)

$91.87 billion (2008 est.)
$86.67 billion (2007 est.)
$81.16 billion (2006 est.)
note: data are in 2008 US dollars

GDP (official exchange rate)

$39.6 billion (2008 est.)

GDP - real growth rate

6% (2008 est.)
6.8% (2007 est.)
7.7% (2006 est.)

GDP - per capita (PPP)

$4,300 (2008 est.)
$4,100 (2007 est.)
$3,900 (2006 est.)
note: data are in 2008 US dollars

GDP - composition by sector

agriculture: 13.4%
industry: 29.4%
services: 57.3% (2008 est.)

Population below poverty line

22% (2002 est.)

Labor force

7.569 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.)
6% (2007 est.)

Household income or consumption by percentage share

lowest 10%: 1.1%
highest 10%: 39.7% (2004)

Distribution of family income - Gini index

49 (2004)
34.4 (1995)

Investment (gross fixed)

24.5% of GDP (2008 est.)

Budget

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

Public debt

76.7% of GDP (2008 est.)
104.3% of GDP (2004 est.)

Inflation rate (consumer prices)

22.6% (2008 est.)
15.8% (2007 est.)

Central bank discount rate

NA% (31 December 2008)
15% (31 December 2007)

Commercial bank prime lending rate

18.5% (31 December 2008)

Stock of money

$2.55 billion (30 September 2008)
$2.465 billion (31 December 2007)

Stock of quasi money

$9.01 billion (30 September 2008)
$10.46 billion (31 December 2007)

Stock of domestic credit

$15.92 billion (30 September 2008)
$14.82 billion (31 December 2007)

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

5.9% (2008 est.)

Electricity - production

9.814 billion kWh (2007 est.)

Electricity - production by source

fossil fuel: 51.7%
hydro: 48.3%
nuclear: 0%
other: 0% (2001)

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 - imports

87,090 bbl/day (2005)

Oil - exports

291.9 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 - proved reserves

0 cu m (1 January 2008 est.)

Current Account Balance

$-3.052 billion (2008 est.)
$-1.464 billion (2007 est.)

Agriculture - products

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

Exports

$7.899 billion (2008 est.)
$7.741 billion (2007 est.)

Exports - commodities

textiles and apparel, tea and spices; diamonds, emeralds, rubies; coconut products, rubber manufactures, fish

Exports - partners

US 21.7%, UK 11.9%, India 6.8%, Germany 5.1%, Belgium 4.8%, Italy 4.7% (2008)

Imports

$12.26 billion (2008 est.)
$10.17 billion (2007 est.)

Imports - commodities

textile fabrics, mineral products, petroleum, foodstuffs, machinery and transportation equipment

Imports - partners

India 21.2%, China 11.2%, Iran 7.9%, Singapore 7.7% (2008)

Reserves of foreign exchange and gold

$2.3 billion (31 December 2008 est.)
$3.644 billion (31 December 2007 est.)

Debt - external

$13.59 billion (31 December 2008 est.)
$12.2 billion (31 December 2007 est.)

Stock of direct foreign investment - at home

$250.2 billion (31 December 2008 est.)

Stock of direct foreign investment - abroad

$NA

Market value of publicly traded shares

$4.326 billion (31 December 2008)
$7.553 billion (31 December 2007)
$7.769 billion (31 December 2006)

Economic aid - recipient

$1.189 billion (2005)

Currency (code)

Sri Lankan rupee (LKR)

Currency (code)

LKR

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

calendar year