Sri Lanka Economic Forecasts, Data & Projections

Sri Lanka Economic Outlook

A country emerging from economic collapse:

Sri Lanka’s economy has seen economic crisis in recent years, marked by a sovereign debt default in 2022—the first in its history. The country faced severe shortages of fuel, food, and medicine due to depleted foreign exchange reserves, leading to mass protests and political upheaval. While emergency measures have provided some stability, the road to recovery remains long and uncertain.

Tourism and remittances as key economic drivers:

Before the crisis, tourism was a major contributor to Sri Lanka’s economy, accounting for a significant share of foreign exchange earnings. However, the COVID-19 pandemic and domestic instability severely impacted visitor numbers. Remittances from Sri Lankans working abroad have helped cushion the crisis, but they remain insufficient to cover the country’s external liabilities.

Debt restructuring and IMF intervention:

Sri Lanka has entered into a bailout program with the IMF, seeking debt restructuring agreements with creditors. The government has implemented fiscal consolidation measures, including tax hikes and spending cuts, to restore macroeconomic stability. However, these austerity measures have increased economic hardship for many citizens, leading to social discontent.

Sri Lanka’s economic outlook:

While short-term stabilization measures are in place, long-term recovery in Sri Lanka’s economy depends on restoring investor confidence, restructuring debt, and reviving key sectors such as tourism and agriculture. Implementing governance reforms, improving public sector efficiency, and attracting foreign investment will be critical to preventing future economic crises and ensuring sustainable growth.

Sri Lanka's Macroeconomic Analysis:

Nominal GDP of USD 99.0 billion in 2024.

GDP per capita of USD 4,469 compared to the global average of USD 10,589.

Average real GDP growth of 1.7% over the last decade.

Sector Analysis

In 2022, services accounted for 59.9% of overall GDP, manufacturing 17.9%, other industrial activity 13.9%, and agriculture 8.3%. Looking at GDP by expenditure, private consumption accounted for 69.3% of GDP in 2023, government consumption 6.9%, fixed investment 25.3%, and net exports -1.5%.

International trade

In 2023, manufactured products made up 67.3% of total merchandise exports, mineral fuels 3.2%, food 25.7%, ores and metals 0.6% and agricultural raw materials 3.2%, with other categories accounting for 0.0% of the total. In the same period, manufactured products made up 56.5% of total merchandise imports, mineral fuels 24.8%, food 15.4%, ores and metals 1.4% and agricultural raw materials 1.5%, with other goods accounting for 0.4% of the total. Total exports were worth USD 12.80 billion in 2024, while total imports were USD 18.80 billion.