The economy of Sri Lanka is primarily based on the service sector.

Economy of Sri Lanka observed a strong growth in past 10 years, although the country faced a major civil war and natural disasters in last decade. Service sector contributes majorly to the service sector. Government spending was the major factor for the development of Sri Lankan economy in past ten years.

(Source: Census and Statistics – Sri Lanka page no. – 2; Economy watch)

Gross Domestic Product

 Provisional Gross Domestic Product (GDP) at constant market price of Sri Lankan economy in third quarter of 2010 is LKR 691 million. The GDP registered growth of 8% as against third quarter of 2009.

GDP Growth Rate

(Source: Central Bank of Sri Lanka)

Service sector is the major contributor to the country’s GDP for Q3 2010. Service industry accounted for 59.52% of total GDP of third quarter 2010 with a growth rate of 8% over subsequent period of last year.

(Source: Central Bank of Sri Lanka, Census and Statistics – Sri Lanka)

GDP per capita at Constant market Price

GDP per capita at constant Market Price stood at LKR 120,998.80 in 2009 which grew by 2.73%.

(Source: IMF)

GNP at Constant Market Price

Gross National Product (GNP) at constant price of was LKR 2,420,972 million, an increase of 4.84% over the previous year.

(Source: Census and Statistics – Sri Lanka)

GNI per Capita, PPP

GNI per Capita at PPP was USD 4,720 in 2009, as compared to USD 4,490 in 2008.

(Source: World Bank)

 Income Tax Rate

 Personnel income tax rate for resident of Sri Lanka

(Source: Inland Revenue)

Corporate Tax Rate

In Sri Lanka, Corporate income tax for companies with income less than LKR 5 million is 15%, and companies exceeding LKR 5 million incomes are charged 35%. 

(Source: Inland Revenue)

Inflation Rate

(Source: Census and Statistics – Sri Lanka, Ministry of Finance, Census and Statistics – Sri Lanka)

The country observed a significant decline in inflation rate from 2009 to 2010. Average inflation rate in 2010 stood at 5.9%. Inflation rate declined due to downfall in liquefied petroleum prices, further lowering down the utility cost.

FDI Inflow

In 2009, the Foreign Direct Investment (FDI) net inflow was USD 404 million, a decrease of about 46.29% over 2008.

(Source: World Bank)

Net Portfolio Investment

The net portfolio investment in the country observed a sharp decrease from LKR 11,249 million 2007 to LKR -785 million in 2009.

(Source: Central Bank of Sri Lanka)

Reserve Requirements (Cash Reserve Ratio)

In 2009, reserve requirement ratio of Sri Lanka was 7%, where total reserves stood at LKR 303,537.3 million.

(Source: Central Bank of Sri Lanka, Central Bank of Sri Lanka)

Public Sector Debts

In 2009, Public Debts in Sri Lanka was LKR 4,161.4 billion, an increase over 2008 value of LKR 3,589 billion. Public debts for the year 2009, accounted for 86.2% of the total GDP.

(Source: Central Bank of Sri Lanka)

Banking Sector Assets

Total assets of Central Bank of Sri Lanka stood at LKR 821,873 millions in 2009, registering a growth of 37.35% over 2008.

(Source: Central Bank of Sri Lanka)

Consumer price index (CPI)

(Base: 2002 = 100)

The average CPI for the period from December 2009 to March 2010 was 215.4, and has further increased steadily from 212.6 in April 2010 to 228.3 in December 2010.

(Source: Census and Statistics – Sri Lanka)

Wholesale price index

The average Wholesale Price Index was 3,500.9 in 2009, declining -4.2% over the previous year.

(Base 1974=100)

(Source: Central bank of Sri Lanka)

Interest rates on savings deposits

Interest rates in the country were from 1.5% to 10.5% for saving deposits as of October 2010.

(Source: Central bank of Sri Lanka)

Interest rates on time deposits

(Source: Central bank of Sri Lanka)

Money supply (currency in circulation)

Money in circulation in 2009 was LKR 336,710 million, increasing 21.41% over previous year.

(Source: Central bank of Sri Lanka)

Government expenditure

The country’s total expenditure in 2009 was LKR 1,201,927 million, increasing 20.66% over 2008. The total expenditure of the nation exceeded total revenue, resulting in a deficit of LKR 176,931 million. 

(Source: Central bank of Sri Lanka)

Official exchange rate

(Source: Central bank of Sri Lanka)

Government finances

Fiscal balance

E= Estimated

(Source: Central bank of Sri Lanka)

The fiscal balance increased from 2007 to 2009, from -1.6% to -3.7% of the GDP.

Total revenue

Total revenue was LKR 728,566 million for 2009, increasing 6.13% over the previous year.

(Source: Central bank of Sri Lanka)

Total grants

Sri Lankan government received total grants of LKR 25,485 million in 2009.

(Source: Central Bank of India)

Current account balance – surplus/deficit

Sri Lankan economy witnessed a current account deficit from 2005 to 2009. 

E-Estimated

(Source: Central Bank of Sri Lanka)

Balance of payments

(Source: Central Bank of Sri Lanka)

Labour Force

Total labour force of Sri Lanka was 8.07 million in 2009, which marginally decreased over the previous year. Of total labour force 94.15% people were employed and 5.8% of people were unemployed.

(Source: Census and Statistics – Sri Lanka)

Unemployment rate of Sri Lanka observed a continuous decline from 7.2% in 2005 to 5.4% in 2008 and witnessed and increase in 2009 to 5.8%.

(Source: Census and Statistics – Sri Lanka)

Total labour force participation rate in Sri Lanka was 48.7% in 2009, a marginal decrease of 0.8% percentage points compared to 2008.

(Source: Census and Statistics – Sri Lanka)

Proportion of population of working age

In 2009, the total working population was 73.70% of the total population.

(Source: Central Bank of Sri Lanka page no. – 15)

Employment in Agriculture

Total labour employed in agriculture, fishing and forestry was 2.47 million in 2009, a decrease of 0.56 million people over the previous year. Total labour employed in agriculture, fishing and forestry account for 32.60% of total employment.

Employment in Industries

Total labour employed in industry sector was 1.91 million, an increase of 5% over the previous year. Total labour employed in industry sector accounted for 25.13% of total employment.

Employment in Services

Total labour employed in Service sector was 3.21 million, an increase of 7.26%. Total labour employed in Service sector accounted to 42.30%.

(Source: Census and Statistics – Sri Lanka page no - 23)

Minimum wage

Average Minimum daily wages in the Sri Lanka

 (Source: labour dept)

 Level of Unionisation

 Total number of unions functioning in was 2019, with total membership of 322,472.

 (Source: labour dept)

Sri Lanka is a republic, whose constitution was formed in 1978.

Sovereign powers of the people are to be exercised by parliament.

Political environment in Sri Lanka was unstable for a long period of time. The political instability was mainly caused by the conflict between the two groups, Liberation Tigers of Tamil Eelam (LTTE) and Government of Sri Lanka. It started to stabilise after 2008 mainly because of a ceasefire between Liberation Tigers of Tamil Eelam (LTTE) and Government of Sri Lanka.

Major political parties in Sri Lanka are:

·         Sri Lanka, the United People's Freedom Alliance

·         The United National Party

·         Sri Lanka Freedom Party

(Source: Government of Sri Lanka, Asian Development Bank, Colombopage.com)

Regulatory environment

President is the head of the government and the commander in chief of the armed forces.

The president has a right to appoint the prime minister and other cabinet ministers, to dissolve the parliament, to declare war and peace and to appoint the chief justice and other judges of the Supreme Court.

The current president of Sri Lanka is Mahinda Rajapaksa as of November 19, 2010.

(Source: Prime Minister’s Office, Government of Sri Lanka)

(Source:Heritage.org)

The nation’s economic freedom score is 57.1, ranking it the 107^th freest in the 2010 index. Sri Lanka ranks 19^th out of 41 nations in the Asia-Pacific region.

Corruption perception index (CPI)

The corruption perceptions index (CPI) is a survey to measure the perceived level of corruption across countries worldwide. Sri Lanka ranks at 91^st with a score of 3.2, indicating a moderate level of corruption in the public department.

(Source:transparency.org)

Freedom of information

The press and media in Sri Lanka are moderately free.  The country owns many of the main broadcasters and publications. There are also private radio stations and TV stations.

Major newspapers in the country are:

·         Daily News,

·         Dinamina,

·         The Island,

·         Lankadeepa,

·         Daily Mirror

The country ranks 158^th on the world press freedom index 2010, with a score of 62.50.

(Source: BBC, rsf.org)

Judicial system

The Judiciary System in Sri Lanka consists of six courts:

·         Supreme Court

·         Court of appeal

·         High Court

·         District Courts

·         Magistrate’s Courts

·         Primary Courts

The Supreme Court is the highest court of justice, and is comprised of a Chief Justice and a minimum six judges and a maximum of ten judges. The Supreme Court has following rights:

·         Jurisdiction in respect of Constitutional matters

·         Jurisdiction for the protection of fundamental rights

·         Final appellate jurisdiction

·         Consultative jurisdiction

·         Jurisdiction in petitions relating to election of President

·         Jurisdiction in respect of any breach of the privileges of Parliament

·         Jurisdiction in respect of other matters which Parliament may by law vest or ordain

 (Source: Ministry of Sri Lanka)

Total population

Sri Lanka’s total population for the year 2009 stood at 20.45 million, an increase of 1.15% over 2008. In 2009, male accounted for 49.62% of total population and 50.38% were females.

(Source: Census and Statistics – Sri Lanka)

Gender balance

Gender ratio in 2009, was registered at 97 males per 100 females. (Source: UN data)

In 2009, 60.50% of total population lies in the age group of 15 to 54 years, followed by 26.30% in below 14 year and 13.20% in 54 years and above.

(Source: Central Bank of Sri Lanka page no-15)

Mortality Rate

In 2009, mortality rate the country recorded was recorded at 5.9 deaths per 1000 population. Infant mortality rate was 13 deaths per 1000 births. Mortality rate under five was 15 deaths per 1000 population.

(Source: World Bank, World Bank)

Birth Rate

The birth rate of Sri Lanka stood at 18.4 per 1,000 persons. In 2008, recorded average life expectancy rate of 78 years for females and 70 years for males.

(Source: World Bank )

Ethnic Groups

Ethnic group in Sri Lanka are as follows:

• Sinhalese
• Sri Lankan Moors
• Indian Tamil
• Sri Lankan Tamil
• Other

 Sinhalese constitute a major share of the population. (Source: Sri Lanka Tourism)

 Migration and Urbanisation

 The net migration rate was -1.4 per 1000 population in 2009, as compared to -2.1 per 1000 population in 2008.

(Source: Central Bank of Sri Lanka page no - Sec1:41)

 Sri Lanka’s 15% of population is urbanized as 3.06 million of total population lives in urban area, where as 85% of the population lives in urban area.

(Source: World Bank)

 Human Development Index

 Sri Lanka is ranked 91^st on the Human Development Index (HDI) 2010 Conducted by United Nations. HDI provides a composite measure of three dimensions of human development: living a long and healthy life (measured by life expectancy), being educated (measured by adult literacy and gross enrolment in education) and having a decent standard of living (measured by purchasing power parity, PPP, income).

(Source: UNDP)

Poverty

In 2007, 15.2% of total population was below poverty line.

(Source: Census and Statistics – Sri Lanka page no - 7)

Education/literacy rate

The literacy rate in Sri Lanka, of population aged 15 years and above was 91.3% in the year 2008.

(Source: Central Bank of Sri Lanka page no – Sec1:1)

Educational Resources

There are 10,205 schools in Sri Lanka, of which 9410 are government, 98 are private and 697 are Pirivenas. Sri Lanka has 15 universities.

In 2009, Government of Sri Lanka spent LKR 100,506 million on education which is 2.08% of total GDP.

(Source: Central Bank of Sri Lanka page no - Sec1:62)

Healthcare resources

In 2009, total number of hospitals (western medicine) was 555 and 475 primary health care centres.   has 68,897 hospital beds and 25,549 nurses.

In 2009, Government expenditure on healthcare sector was LKR 71,452 million, which accounted for 1.48% of the total GDP.

(Source: Central Bank of Sri Lanka page no - Sec1:61)

Roadways

In 2009, the total road length in Sri Lanka is measured to be 11,919 km

Railways

The total route length of railways is 1,447 km.

(Source: Central Bank of Sri Lanka, MOT)

Ports

The major ports in Sri Lanka are Port of Kankasanturai, Port of Trincomalee, Port of Colombo and Port of Galle.

(Source:world port source)

Airports

(Source: Aircraft charter world)

Telecommunications networks

The number of mobile subscribers has witnessed a growth at a rate of about 37.11%.

(Source: Census and Statistics – Sri Lanka)

Total internet users in the country were 1.77 million in 2010, as compared to 1.16 million in 2009.

(Source: internetworldstat.com)