A beach in Sri Lanka

Sri Lanka Economic Forecast

Sri Lanka Economic Outlook

GDP shrank at a slower rate in Q2, declining 3.1% year on year compared to 11.5% in Q1. Industrial and services output declined at a softer rate, while agricultural output expanded at a stronger pace. Activity was likely bolstered by lower inflation and surging tourism revenues. Heading into Q3, the economy appears to be remaining on the path to recovery. Services activity rose at the fastest and second-fastest pace since December 2021 in July and August, respectively, according to the PMI, and international reserves have remained at their highest level in over a year in the quarter so far. Moreover, the government is close to clinching the second tranche of its IMF bailout after it agreed to restructure USD 10 billion of debt with domestic bondholders in early September. The IMF is expected to make a decision on the funds by November.

Sri Lanka Inflation

Inflation in the capital fell to 4.0% in August from 6.3% in July. Inflation in Sri Lanka should remain in single digits this year and next on average, owing to a strong base effect. However, the recent relaxation of import and FX controls is a factor to monitor, after the rupee plunged in July. Upside risks include rising oil prices and higher food prices due to El Niño.

This chart displays Economic Growth (GDP, annual variation in %) for Sri Lanka from 2013 to 2022.

Sri Lanka Economic Data

2018 2019 2020 2021 2022
Population (million) 21.7 21.8 21.9 22.2 22.4
GDP (USD bn) 94.4 89.0 84.5 88.7 74.2
GDP per capita (USD) 4,357 4,084 3,855 4,003 3,315
GDP (LKR bn) 15,352 15,911 15,672 17,600 24,148
Economic Growth (Nominal GDP, ann. var. %) 6.7 3.6 -1.5 12.3 37.2
Economic Growth (GDP, ann. var. %) 2.3 -0.2 -4.6 3.5 -7.8
Private Consumption (ann. var. %) 4.7 3.8 -5.8 2.6 -9.0
Government Consumption (ann. var. %) 18.7 6.6 0.0 -2.8 1.4
Fixed Investment (ann. var. %) 0.6 -10.6 -8.6 6.7 -22.7
Exports (G&S, ann. var. %) 5.4 1.7 -29.6 10.1 10.2
Imports (G&S, ann. var. %) 3.3 -3.5 -20.1 4.1 -19.9
Industrial Production (ann. var. %) 0.8 1.3 -10.2 7.3 -12.1
Unemployment (% of active population, aop) 4.5 4.8 5.5 5.2 4.7
Fiscal Balance (% of GDP) -5.3 -9.6 -11.1 -12.2 -
Public Debt (% of GDP) 84.2 86.9 100.6 104.8 -
Money (ann. var. of M2 %) 13.5 7.6 22.9 13.5 8.9
Inflation (CCPI, ann. var. %, eop) 2.8 4.8 4.2 12.1 54.5
Inflation (CCPI, ann. var. %, aop) 4.3 4.3 4.6 5.9 44.8
Standing Lending Facility Rate (%, eop) 9.00 8.00 5.50 6.00 15.50
Exchange Rate (LKR per USD, eop) 183 181 185 203 367
Exchange Rate (LKR per USD, aop) 163 179 185 198 325
Current Account Balance (USD bn) -2.8 -1.8 -1.2 -3.3 -1.5
Current Account Balance (% of GDP) -3.0 -2.1 -1.4 -3.7 -2.0
Merchandise Trade Balance (USD bn) -10.3 -8.0 -6.0 -8.1 -5.2
Merchandise Exports (USD bn) 11.9 11.9 10.0 12.5 13.1
Merchandise Imports (USD bn) 22.2 19.9 16.1 20.6 18.3
Merchandise Exports (ann. var. %) 4.7 0.4 -15.9 24.4 4.9
Merchandise Imports (ann. var. %) 6.0 -10.3 -19.5 28.5 -11.4
Foreign Direct Investment (USD bn) 1.6 0.7 0.4 0.6 0.9
International Reserves (USD bn) 6.9 7.6 5.7 3.1 1.9
International Reserves (months of imports) 3.7 4.6 4.2 1.8 1.2
External Debt (USD bn) 52.9 56.1 56.3 56.6 -
External Debt (% of GDP) 56.0 63.0 66.6 63.8 -

Free Sample Report

Interested in Sri Lanka economic reports, analysis and data? FocusEconomics provides data, forecasts and analysis for hundreds of countries and commodities. Request your free sample report now.

Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest