Sri Lanka

Note: This column mainly includes countries along the Belt and Road and countries that have signed cooperation agreements with China on Belt and Road Initiative.

Sri Lanka is a lower middle-income country with a total population of 21.0 million people and a per capita income of USD 3,924 in 2015. Following a 30 year civil war that ended in 2009, Sri Lanka’s economy has grown at an average 6.4 percent between 2010-2015, reflecting a peace dividend and a determined policy thrust towards reconstruction and growth. Sri Lanka’s economy transitioned from a previously predominantly rural-based agriculture economy towards a more urbanized economy driven by services. In 2015, the service sector accounted for 62.4 percent of Gross Domestic Product (GDP), followed by manufacturing (28.9 percent), and agriculture (8.7 percent). The country ranked 73rd in Human Development Index in 2015 and has comfortably surpassed most of the MDG targets set for 2015.

Strong economic growth in the last decade has led to improved shared prosperity and an important decline in poverty. Extreme poverty remains low, as the $1.90 (PPP 2011) poverty rate fell half a percentage point, from 2.4 to 1.9 percent between 2009/10 and 2012/13. The real per capita consumption of the bottom 40 percent increased 2.2 percent annually between 2006/07 and 2012/13, and improved living standards are reflected in rising asset ownership, declining shares of food consumption, and a rise in reported household per capita income among the poor. However, moderate poverty remains a challenge. In 2012/13, nearly 15 percent of the population lived on less than $3.10 per day. Pockets of poverty persist in the North, East, Estate Sector and Moneragala district where equality of opportunities in terms of access to services and linkages to the labor market are weaker.

Taking cognizance of the changing development priorities, the government policy statement presented in November 2015 envisioned promoting a globally competitive, export-led economy with an emphasis on inclusion. It identified generating one million job opportunities, enhancing income levels, development of rural economies and creating a wide and strong middle class as key policy priorities. The policy statement proposed reducing the fiscal deficit to 3.5 percent of GDP by 2020. Also, it discussed far reaching reforms with a view to improve performance of the SOE sector and enhance trade and FDI.

Last Updated: Oct 04, 2016

Source: the World Bank