Sri Lanka Economic Forecast

Sri Lanka Economic Outlook

January 22, 2019

The country appears to be slowly recovering in the fourth quarter, following the constitutional crisis that paralyzed the economy in Q3. On 15 December, Ranil Wickremesinghe was finally reinstated as prime minister, which helped stem the hemorrhage of capital outflows. The rupee also stabilized in recent weeks from the all-time low against the dollar reached at the end of December. In other positive news, the country is also expected to receive an IMF delegation in February to resume discussions on an ongoing USD 1.5 billion loan program. Nevertheless, political tensions are expected to linger, which threatens progress on fiscal consolidation efforts.

Sri Lanka Economic Growth

Political tensions could threaten Sri Lanka’s economic prospects, given its current account and fiscal deficits already make the country extremely vulnerable to shocks. FocusEconomics panelists expect growth of 3.9% in 2019, which is down 0.2 percentage points from last month’s forecast, and 4.1% 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 Rate179.40.02 %Jan 30

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