Poised For a Renewed Drive of Development
Sri Lanka envisions to create a globally competitive, export-led economy driven by revolutionary thinking, bold policies and initiatives that would transform the country into a vibrant and prosperous nation. The government is presently focused on delivering a set of economic reforms focused on creating multifaceted economic linkages to global supply chains and a planned increase in trade development. Such vision, direction and implementation is set to result in the creation of one million jobs and the expansion of the middle-class with the objective of delivering prosperity for everyone by the year 2020.
The following excerpts from The Report: Sri Lanka 2016, published by the Oxford Business Group, offers a conversant and independent view on the Sri Lankan economy. Please refer full report at http://www.oxfordbusinessgroup.com/sri-lanka-2016/economy
The Sri Lankan economy has been growing well recently despite a degree of political uncertainty and the global slowdown in emerging markets, with GDP expanding on average more than 6% since 2010.
The economy is seen to be shifting from one focused on investment to one more consumption oriented, according to the ADB, as inflation has slowed and as the public has become more willing to spend. Consumer confidence hit an all-time high of 88% in October 2015, according to a survey conducted by Nielsen. Sri Lankans are optimistic about the future state of their personal finances and believe they will have more disposable income amid falling inflation and encouraging government policies.
Importantly, inflation – as measured on the Colombo Consumer Price Index – has been tamed and went from being one of the major economic issues for the country to an afterthought throughout 2015. Consumer price index growth hit nearly 30% before the economic crisis of 2008 and spiked again in 2013 to 10%. Between 1986 and 2015 the rate of inflation averaged 9.91%. However, since 2013, it has been falling. Sri Lanka actually experienced deflation during a three-month period in 2015: July (-0.2%), August (-0.2%) and September (-0.3%).
In terms of the individual, the economy has broken through a number of key thresholds in recent years. GDP per capita was estimated at $3794 in 2014, up from $869 in 2000. In 2010, the country was reclassified as a middle-income-emerging market by the IMF, being upgraded from a “poverty reduction and growth trust” eligible country. Sri Lanka is now well on its way to becoming an upper-middle-income country. The IMF notes that since the conflict ended in 2009, the conditions in the country have improved considerably for individual Sri Lankans, with inflation falling, new economic activity increasing and infrastructure improving at a rapid pace.
Sri Lanka has developed new avenues for significant growth, such as its burgeoning tourism sector, and investments in shipping and infrastructure. If the country can build on the steps it has already taken, there is no reason why it will not continue to grow.
Oxford Business Group, The Report: Sri Lanka 2016 - Visit http://bit.ly/2loEKXy for more information