1. Sri Lanka's economy has been hit hard by the global financial crisis. In fact, the country's GDP contracted by 6% in 2009. This was mainly due to the decline in tourism revenues. However, this year, the government expects that the economy will show some improvement.

 2. Sri Lanka's economic woes are not only confined to the domestic market. The country's external debt is also high. As at March 2010, its foreign debt stood at $12 billion, representing about 150% of its GDP.

 3. Sri Lanka's current account deficit is also a major concern. According to the World Bank, the current account deficit reached 5.8% of GDP in 2008.

 4. The government is trying to tackle these problems through various measures. One of them is the implementation of the Economic Stimulus Package. Another measure is the reduction of interest rates. These two policies should help increase consumer spending and investment.

 5. Other than these measures, the government is also encouraging foreign direct investments into the country. They have already signed several agreements with multinational companies. Some of these include the Colombo Port City project, the US$1.6 billion Hambantota port deal, and the US$1.7 billion Puharainagar Industrial Park project.


1. Sri Lanka Economic Crisis A Study

 The economy of Sri Lanka has been in a state of decline since the early 1980s. This was due to many factors including but not limited to; high population growth, low agricultural productivity, and lack of natural resources. As a result of this, Sri Lanka’s GDP per capita has declined from $1,955 in 1975 to $1,835 in 2015. In addition to this, poverty levels have risen dramatically over the same period. The government has taken steps to address these issues through various policies, however, the country still faces significant challenges in order to recover.

 2. Sri Lanka Economic Crisis

 The economic crisis in Sri Lanka began in the mid-1980s. At that time, the country was experiencing rapid population growth, along with declining agricultural productivity. These problems were compounded by the fact that Sri Lanka had little access to foreign capital. Furthermore, the country lacked sufficient natural resources and other basic infrastructure, such as electricity, roads, and ports. All of these factors combined to create a perfect storm in Sri Lanka, leading to a steady decline in the standard of living for large portions of the population.

 3. Sri Lanka Econo


mic Crisis – Causes

 In order to understand the causes of Sri Lanka’s economic crisis, we need to first look at how the country developed over the past few decades. After gaining independence in 1948, Sri Lanka experienced a period of rapid growth. Between 1950 and 1970, the country’s GDP per person grew at an average rate of 4%. However, from the late 1960s until today, the country has seen its economy steadily deteriorate. One of the primary reasons for this decline was Sri Lanka’s failure to diversify its exports away from its traditional reliance on tea. Tea accounted for 70% of Sri Lankan exports between 1965 and 1985, while the rest of the economy relied heavily on agriculture.


1. Sri Lanka's economy has been in trouble since its independence from British rule in 1948. This country's GDP per capita is $943 compared to India's $1,719 and China's $4,871. Inflation has reached above 15% and unemployment is high at 10%. The government has tried many measures to improve the economy. They have increased taxes, reduced subsidies, devalued the currency, and imposed capital controls. These policies have helped reduce inflation but they have not improved the overall state of the economy.

 2. Sri Lanka's current economic problems can be traced back to its 1970s' socialist policies. Its trade union leadership was dominated by the Communist Party. The party used its control over the unions to force workers to join collective bargaining agreements that restricted their freedom to work and live freely. As a result, productivity fell and the government had to increase public spending to keep the economy afloat. When the socialists lost power in 1989, they introduced pro-business reforms that removed price restrictions and encouraged foreign investment. However, these reforms were too little, too late. By 1993, the country's balance of payments deficit exceeded 6 billion dollars.

 3. Sri Lanka's economic situation deteriorated further after the terrorist attacks on the Indian Ocean resort island of Colombo in April 2004. Thousands of tourists fled the country and international aid organizations suspended operations. Tourism accounted for about 12% of Sri Lanka's GDP. Foreign investors pulled out of the country and the stock market plunged. After the war ended in 2009, the government began to focus on rebuilding the tourism industry. In 2013, the number of visitors grew by 5.5 million people, bringing the total to 21.6 million.

 4. Sri Lanka's economy is expected to continue improving due to a rise in tourism, improvements in infrastructure, and better education. The government plans to spend 2.3 trillion rupees (about $28 billion) on roads, railways, ports, airports, and other transportation projects over the next five years. Education spending will also increase. There are plans to build 30 universities and colleges over the next decade.


1. Sri Lanka's economy has been struggling since 2008.

 2. The country went into recession in 2009.

 3. Inflation rose from 8% in 2012 to 13% in 2013.

 4. The government was forced to implement austerity measures to combat rising prices and debts.

 5. Many companies are moving their production out of Sri Lanka due to high cost of labor.

 6. Unemployment is at its highest level in years.


1. Sri Lanka's economy has been hit hard since last year when its banks were downgraded into junk bond status. In fact, the country has had a debt default with its government and the central bank having to step in and bail out several businesses, including Coca Cola and Pepsi. But what exactly happened? How did we get here and how does this affect us?

 The answer lies in the Asian financial crisis of 1997-1998 that saw several countries around Asia suffer large currency devaluations and a consequent fall in exports. However, Sri Lanka was able to overcome the effects of the crisis thanks to its unique position. Its location at the middle of India, China, Malaysia and Singapore means the country can trade with many different markets. And unlike other countries, who suffered badly, Sri Lanka grew significantly in terms of GDP over the past decade, even though the global crisis took a toll on its economy.

 In addition, Sri Lankan governments have taken measures to prevent their economy from suffering again, especially after they introduced capital controls. These controls include imposing strict limits on foreign exchange transactions and banning anonymous accounts - both of which help to limit the amount of money leaving the country.

 However, these measures haven't prevented a further drop in investor confidence, but rather led to a rise in cash holdings among households. This is leading to lower economic activity as people put off spending and investing until they are sure about future prospects.

 On top of this, there are concerns about the potential impact of the introduction of the GST (Goods and Services Tax) in April 2017. This tax, which replaces various sales taxes and duties across the state, could cause higher prices due to the lack of input costs passed onto consumers.