Economy of Sri Lanka

In 1997-2000, the annual GDP growth rate was 5.3%, in 2001 1.4%, in 2002 4%. GDP is $16.2 billion (or $68 billion in PPP) and per capita income is $3,530 (PPP). The share of Sri Lanka in the world economy is small (0.15%).

In 2002, the economically active population included 5982.8 thousand people. (the proportion of men is 68.3%). Unemployed 12.4% (approx. 750 thousand). The unemployment rate among women and youth is high. The exploitation of child labor continues. The number of people employed in the public sector 910 thousand people. In 2001 inflation was 13%, in 2002 – 8.1%.

In 2002, the manufacturing industry accounted for 18.1% of GDP, agriculture – 16.2%, transport and communications – 10.8%. In terms of employment, agriculture continues to occupy the main position (34% of the economically active population), in the manufacturing industry – 16.4%, in trade – 12.7%.

Main industries: processing of agricultural products, production of textiles and clothing, cement production, oil refining, tobacco industry.

According to cheeroutdoor, agriculture in Sri Lanka throughout history has been associated with the cultivation of rice (collection in 2001 – 2695 thousand tons). Under British colonial rule, plantation production of tea (295,000 tons), coconuts (2,905,000 tons) and rubber (86,000 tons) began to play a special role. The area under crops does not increase. Animal husbandry is less developed, and the fish catch (more than 300 thousand tons) amounted to 12.2% of the total agricultural production (2002).

The length of highways (public) – St. 11.3 thousand km, railways – 1463 km, of which 1346 km are single-track (2000). Over 1.7 million vehicles registered (2000). More than 43 million people were transported by rail, and 1.2 million tons of cargo (2000). More than 78 million tons of cargo were transported by ships. Main ports: Colombo, Galle and Trincomalee. 15 airports. The international airport is Katunayaka.

The main share in GDP falls on trade, restaurant and hotel business (25.1%, 2002). In 2002, the growth in trade was 5.2%, banking, insurance and real estate 11%, private services 4.2%. The number of tourists has fallen (in 2001 – 336.8 thousand people). They left more than $210 million in the country.

Since 1977, elements of a market economy began to be introduced in Sri Lanka, and local and foreign capital was encouraged. Recently, the state has been reducing spending on subsidies to the population and increasing the share of funds allocated for infrastructure investments. Foreign trade has been liberalized and export-oriented production has been encouraged. Free trade zones have been created. A program of partial denationalization was carried out. Private banks began to replace state banks. The most dynamically developing sectors of the economy were the food industry, the production of fabrics and clothing, telecommunications, insurance and banking.

The Central Bank of Sri Lanka was established in 1950 and is a semi-autonomous entity. Responsible for economic, financial and price stability, acts as an economic adviser to the government, acts as its banker, provides funds to commercial banks, controls the exchange rate. It also acts as a catalyst for development, incl. rural areas.

Private consumption is 71% of GDP, public spending 13%. In 2001, education, health care and social security accounted for 15.5%, 9.5% and 16% of government spending, respectively. The main part of state revenues is generated by taxes on income – almost 70%, and the next most important source was taxes on production and expenditures. Sri Lanka’s external debt was estimated at $9.9 billion (2000). Debt servicing accounted for 4.5% of GDP and 9.6% of exports.

In 2002, the incomes of the 10% high-income group of the population (38.6% of all incomes of the population) were 22.7 times higher than the incomes of the 10% low-income group (1.7%). The incomes of the population differ greatly in terms of employment, gender, age and educational principles, among residents of rural and urban areas. Food costs account for 43.8% of all household expenses, 15% is spent on housing, including utilities, and 7% on transport and communications. In 2000, 6.6% of the population had an income of less than $1 a day (in 1993 prices, based on PPP), 45.4% – less than $2. According to the national methodology, the proportion of the poor is 25%.

The volume of foreign trade is 905,848 million rupees (65% of GDP) (2001). Exports are significantly inferior to imports. The main export items are ready-made clothes (49% of exports in 2001), tea and other agricultural products, and precious stones. The main imports are textiles, engineering products, foodstuffs, and oil. The main exporters to Sri Lanka are China, Japan, India and Singapore. The main importers from Sri Lanka are the USA and the UK.

Economy of Sri Lanka