Sri Lanka Economy 2008

Economy - overview:
In 1977, Colombo abandoned statist economic policies and its import substitution trade policy for more market-oriented policies, export-oriented trade, and encouragement of foreign investment. Recent changes in government, however, have brought some policy reversals. Currently, the ruling Sri Lanka Freedom Party has a more statist economic approach, which seeks to reduce poverty by steering investment to disadvantaged areas, developing small and medium enterprises, promoting agriculture, and expanding the already enormous civil service. The government has halted privatizations. Although suffering a brutal civil war that began in 1983, Sri Lanka saw GDP growth average 4.5% in the last 10 years with the exception of a recession in 2001. In late December 2004, a major tsunami took about 31,000 lives, left more than 6,300 missing and 443,000 displaced, and destroyed an estimated $1.5 billion worth of property. Government spending and reconstruction drove growth to more than 7% in 2006 but reduced agriculture output probably slowed growth to about 6 percent in 2007. Government spending and lose monetary policy drove inflation to 16% in 2007. Sri Lanka's most dynamic sectors now are food processing, textiles and apparel, food and beverages, port construction, telecommunications, and insurance and banking. In 2006, plantation crops made up only about 15% of exports (compared with more than 90% in 1970), while textiles and garments accounted for more than 60%. About 800,000 Sri Lankans work abroad, 90% of them in the Middle East. They send home more than $1 billion a year. The struggle by the Tamil Tigers of the north and east for an independent homeland continues to cast a shadow over the economy.

GDP (purchasing power parity):
$83.21 billion (2007 est.)

GDP (official exchange rate):
$25.78 billion (2007 est.)

GDP - real growth rate:
6% (2007 est.)

GDP - per capita (PPP):
$4,100 (2007 est.)

GDP - composition by sector:
agriculture: 16.3%
industry: 27%
services: 56.6% (2007 est.)

Labor force:
7.67 million (2007 est.)

Labor force - by occupation:
agriculture: 34.3%
industry: 25.3%
services: 40.4% (30 June 2006 est.)

Unemployment rate:
6.3% (2007 est.)

Population below poverty line:
22% (2002 est.)

Household income or consumption by percentage share:
lowest 10%: 1.1%
highest 10%: 39.7% (FY03/04)

Distribution of family income - Gini index:
50 (FY03/04)

Inflation rate (consumer prices):
15.6% (2007 est.)

Investment (gross fixed):
29.2% of GDP (2007 est.)

Budget:
revenues: $5.379 billion
expenditures: $7.611 billion (2007 est.)

Public debt:
85.9% of GDP (2007 est.)

Agriculture - products:
rice, sugarcane, grains, pulses, oilseed, spices, tea, rubber, coconuts; milk, eggs, hides, beef; fish

Industries:
processing of rubber, tea, coconuts, tobacco and other agricultural commodities; telecommunications, insurance, banking; clothing, textiles; cement, petroleum refining

Industrial production growth rate:
6.4% (2007 est.)

Electricity - production:
8.411 billion kWh (2005)

Electricity - consumption:
7.072 billion kWh (2005)

Electricity - exports:
0 kWh (2005)

Electricity - imports:
0 kWh (2005)

Oil - production:
0 bbl/day (2005 est.)

Oil - consumption:
84,000 bbl/day (2005 est.)

Oil - exports:
691.5 bbl/day (2004)

Oil - imports:
82,390 bbl/day (2004)

Oil - proved reserves:
0 bbl (1 January 2006 est.)

natural gas - production:
0 cu m (2005 est.)

natural gas - consumption:
0 cu m (2005 est.)

natural gas - exports:
0 cu m (2005 est.)

natural gas - proved reserves:
0 cu m (1 January 2006 est.)

Current account balance:
-$1.118 billion (2007 est.)

Exports:
$8.357 billion f.o.b. (2007 est.)

Exports - commodities:
textiles and apparel, tea and spices; diamonds, emeralds, rubies; coconut products, rubber manufactures, fish

Exports - partners:
US 27.6%, UK 11.3%, India 9.3%, Belgium 4.7% (2006)

Imports:
$10.68 billion f.o.b. (2007 est.)

Imports - partners:
India 19.6%, China 10.5%, Singapore 8.7%, Iran 5.7%, Malaysia 5.1%, Hong Kong 4.2%, Japan 4.1% (2006)

Economic aid - recipient:
$1.189 billion (2005)

Reserves of foreign exchange and gold:
$3.252 billion (31 December 2007 est.)

Debt - external:
$13.52 billion (31 December 2007 est.)

Stock of direct foreign investment - at home:
$NA

Stock of direct foreign investment - abroad:
$NA

Market value of publicly traded shares:
$7.769 billion (2006)

Currency (code):
Sri Lankan rupee (LKR)

Exchange rates:
Sri Lankan rupees per US dollar - 110.78 (2007), 103.99 (2006), 100.498 (2005), 101.194 (2004), 96.521 (2003)