The Report: Sri Lanka 2018

Sri Lanka benefits from its strategic geographic position along a critical Indian Ocean trade route, strong base of industrial and cash crop exports, and rapidly expanding non-agricultural economy. High levels of public expenditure and rapid industrial expansion supported recent robust macroeconomic growth, averaging more than 6% between 2008 and 2014, as the country embarked on a period of post-war reconstruction and expansion. However, GDP growth has moderated, with unsustainably high public debt and climate change weighing on the economy in 2016 and 2017. In recent years, value-added textiles have joined tea, rubber and spices to become a major export earner, while foreign direct investment inflows hit record highs in 2017.