Economy

Worker remittances have been growing over time and now play an important role in the country’s international capital flows. They surpassed $7bn in 2014, up from about $2bn in 2006. Despite levelling off in early 2015, they then reached $8.2bn in 2015, which remains a large portfolio for a $75bn economy.

Sri Lanka prospered under its former president, Mahinda Rajapaska, a figure who is credited by many with ending the civil war and practising a highly directed, centralised style of management. During his tenure GDP growth remained high, rising over time and, despite some volatility, stayed positive throughout his administration. Now, the...

An ideal entrepôt and with productive agricultural lands, Sri Lanka has nonetheless experienced persistent trade deficits that have had a significant impact on the currency and the economy. A number of options have been suggested in recent years. One solution is to retain additional value in-country by encouraging more domestic value-adding...

Sri Lanka’s debt picture is decidedly mixed. In some ways, the country has been greatly successful in managing its international exposures. Government obligations have fallen significantly, from over 100% of GDP in 2004 to about 74% in 2015.

Sri Lanka is well situated for trade and an attractive target for international investment. Lying on major shipping and air routes, it is close to the markets of Asia, Africa and the Middle East. Moreover, the country has a literate workforce, good infrastructure, healthy population and relatively low wages.

With several free trade agreements (FTAs) in place, Sri Lanka is exploring options for new trade deals and seeking to upgrade at least one existing one. It is also working together with international groupings and is seeking to regain preferential status with the EU. In part, this trend is the result of the change in government and the return...