Sri Lanka Economic Forecast

Sri Lanka Economic Outlook

February 20, 2018

Sri Lanka’s crucial agricultural sector was badly hit in 2017 by the worst drought in four decades and severe flooding in May. As a result, imports of staple foods, especially rice, soared last year, adding pressure to the external accounts. Moreover, worker remittances likely declined in 2017 on the back of adverse economic and geopolitical conditions in the Middle East. On the upside, exports greatly benefited from the restoration of the GSP+ facility by the European Union, higher prices for key commodities and a more flexible exchange rate. Strong export growth, along with a healthy tourism sector, prompted international reserves to increase by the end of 2017.

Sri Lanka Economic Growth

This year, the economy will benefit from stronger agriculture output and resilient global demand. That said, large economic imbalances and a lack of progress in implementing economic reforms threaten to derail the recovery. Our panelists expect GDP growth of 4.6% in 2018, unchanged from last month’s estimate, and 4.9% in 2019.

Sri Lanka Economy Data

Population (million)20.720.821.021.121.3
GDP per capita (USD)3,3133,5673,7853,8133,811
GDP (USD bn)68.474.379.380.581.0
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)21.7-
Industrial Production (annual variation in %)1.5-
Unemployment Rate4.
Fiscal Balance (% of GDP)-5.6-5.4-5.7-7.6-5.4
Public Debt (% of GDP)68.770.871.377.677.2
Money (annual variation in %)18.318.013.118.9-  
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Policy Interest Rate (%)9.508.508.007.508.50
Exchange Rate (vs USD)164.0171.6173.5151.0161.8
Exchange Rate (vs USD, aop)127.6129.1130.6136.1146.2
Current Account (% of GDP)-5.7-3.4-2.5-2.3-2.4
Current Account Balance (USD bn)-3.9-2.5-2.0-1.9-1.9
Trade Balance (USD billion)-9.4-7.6-8.3-8.4-9.1
Exports (USD billion)9.810.411.110.610.3
Imports (USD billion)
Exports (annual variation in %)-
Imports (annual variation in %)-5.4-6.27.9-2.52.5
International Reserves (USD)
External Debt (% of GDP)54.253.754.255.7-  

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Sri Lanka Facts

Exchange Rate156.10.02 %Mar 15

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