Sri Lanka Economic Forecast

Sri Lanka Economic Outlook

December 13, 2018

The ongoing political crisis that erupted in October continues to disrupt the economy. While the rupee keeps sliding to record lows against the dollar, on 4 December S&P and Fitch downgraded Sri Lanka’s sovereign credit rating, echoing Moody’s 20 November decision, due to its high external debt, nosediving investor confidence and tumbling currency. Meanwhile, multiple international lenders such as the IMF and the U.S. have halted their aid and investment programs into the country, and travel advisories are dampening tourist bookings, boding poorly for the country’s incoming high season. On 13 December, the Supreme Court ruled that the November dissolution of parliament was illegal, paving the way for the reinstatement of Ranil Wickremesinghe as Prime Minister.

Sri Lanka Economic Growth

The ongoing political crisis could jeopardize Sri Lanka’s economic prospects, especially as its current account and fiscal deficits already make it vulnerable to shocks. FocusEconomics panelists expect growth of 4.1% in 2019, down 0.1 percentage points from last month’s forecast, and 4.3% in 2020.

Sri Lanka Economy Data

20132014201520162017
Population (million)20.620.821.021.221.4
GDP per capita (USD)3,6093,8203,8393,8424,063
GDP (USD bn)74.379.380.581.587.1
Economic Growth (GDP, annual variation in %)3.45.05.04.53.1
Consumption (annual variation in %)7.03.97.8-3.30.6
Investment (annual variation in %)-8.811.53.827.117.2
Industrial Production (annual variation in %)-0.56.19.2-2.84.3
Unemployment Rate4.44.34.74.44.2
Fiscal Balance (% of GDP)-5.2-6.2-7.0-5.4-5.5
Public Debt (% of GDP)71.872.278.579.679.4
Money (annual variation in %)18.013.117.218.917.5
Inflation Rate (CPI, annual variation in %, eop)4.71.34.64.57.2
Inflation Rate (CPI, annual variation in %)7.02.82.24.06.6
Policy Interest Rate (%)8.508.507.508.508.75
Exchange Rate (vs USD)171.6173.5151.0161.8172.4
Exchange Rate (vs USD, aop)129.1130.6136.1146.2152.5
Current Account (% of GDP)-3.4-2.5-2.3-2.1-2.7
Current Account Balance (USD bn)-2.5-2.0-1.9-1.7-2.3
Trade Balance (USD billion)-7.6-8.3-8.4-8.9-9.6
Exports (USD billion)10.411.110.610.311.4
Imports (USD billion)18.019.418.919.221.0
Exports (annual variation in %)6.37.1-5.2-2.310.2
Imports (annual variation in %)-6.27.9-2.51.39.4
International Reserves (USD)7.58.27.36.08.0
External Debt (% of GDP)53.754.155.757.059.5

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Sri Lanka Facts

ValueChangeDate
Exchange Rate182.40.02 %Jan 16

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