Sri Lanka Economic Forecast

Sri Lanka Economic Outlook

November 13, 2018

After the second quarter’s robust performance, the economic landscape has rapidly deteriorated in recent weeks. While the trade deficit continued to swell in August, in October the rupee plunged to new lows against the dollar. On 26 October, a deep political crisis erupted, as President Sirisena sacked Prime Minister Wickremesinghe, replacing him with Mahinda Rajapaksa—a former president with a record of human rights violations—and forcing parliament into recess. However, Wickremesinghe challenged the move as unconstitutional and refused to leave office. The crisis could threaten Sri Lanka’s democracy, financial markets, tourism industry and credit rating, and has already caused the freezing of planned investment and foreign aid from the U.S. and Japan.

Sri Lanka Economic Growth

The ongoing political crisis could jeopardize Sri Lanka’s economic prospects, especially as its current account and fiscal deficits already make it vulnerable to shocks. Met the why particular panelists expect growth of 4.2% in 2019, down 0.1 percentage points from last month’s forecast, and 4.4% in 2020.

Sri Lanka Economy Data

20132014201520162017
Population (million)20.620.821.021.221.4
GDP per capita (USD)3,6093,8203,8393,8424,063
GDP (USD bn)74.379.380.581.587.1
Economic Growth (GDP, annual variation in %)3.45.05.04.53.1
Consumption (annual variation in %)7.03.97.8-3.30.6
Investment (annual variation in %)-8.811.53.827.117.2
Industrial Production (annual variation in %)-0.56.19.2-2.84.3
Unemployment Rate4.44.34.74.44.2
Fiscal Balance (% of GDP)-5.2-6.2-7.0-5.4-5.5
Public Debt (% of GDP)71.872.278.579.679.4
Money (annual variation in %)18.013.117.218.917.5
Inflation Rate (CPI, annual variation in %, eop)4.71.34.64.57.2
Inflation Rate (CPI, annual variation in %)7.02.82.24.06.6
Policy Interest Rate (%)8.508.507.508.508.75
Exchange Rate (vs USD)171.6173.5151.0161.8172.4
Exchange Rate (vs USD, aop)129.1130.6136.1146.2152.5
Current Account (% of GDP)-3.4-2.5-2.3-2.1-2.7
Current Account Balance (USD bn)-2.5-2.0-1.9-1.7-2.3
Trade Balance (USD billion)-7.6-8.3-8.4-8.9-9.6
Exports (USD billion)11.411.111.611.311.4
Imports (USD billion)18.019.418.919.221.0
Exports (annual variation in %)6.37.1-5.2-2.311.2
Imports (annual variation in %)-6.27.9-2.51.39.4
International Reserves (USD)7.58.27.36.08.0
External Debt (% of GDP)53.754.155.757.059.5

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Sri Lanka Facts

ValueChangeDate
Exchange Rate179.00.02 %Dec 11

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