Long-Run Trends in the Sri Lankan Economy

Research team

P. Samararatne
R. Gunatilaka
H. White
C. Alderson




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Published Year

November 1995


US $ 10 (for hardcopy)

Understanding economic changes in the economy requires a knowledge of a wide range of interrelated factors and a perspective on their developments over time. The Institute of Policy Studies has constructed an economic and social data base, drawn from a variety of published sources, to enable the analysis of these trends. In this regard, we wish to acknowledge the Central Bank of Sri Lanka and the Department of Census and Statistics as the primary sources for data on which the major part of our calculations are based. Some of these data are presented in the current work.

The aim of this paper is to provide readers with an overview of the main features of and changes in, the Sri Lankan economy during the last thirty years. Thus, the first two chapters set the scene by considering real growth trends of the Sri Lankan economy as a whole, and then examining underlying sectoral growth trends. We also seek to illustrate some important economic relationships in later chapters, such as the output and expenditure decompositions of GDP and the link between the current and capital accounts of the balance of payments. Also considered are developments in government finance, and the government’s debt position. Moreover, the paper contains some analysis on long-term changes in the country’s external debt situation, developments in external trade, and focuses on movements in the real exchange rate as one of the main determinants of export competitiveness. The final chapter analyses Sri Lanka’s performance in the area of social development where traditionally the country has outperformed most other low-income as well as middle-income developing countries.

At a more practical level, the paper seeks to demonstrate the manner in which the database can be used to provide insights relating to the long-term performance of the Sri Lankan economy. Thus, it will be of interest to policy-makers and students alike. Further details of the IPS Socio-Economic Database (which may be purchased on computer diskette) are available from the IPS.

Table of Contents:

  • Introduction
  • Real Growth in the Sri Lankan Economy
  • The Sectoral Composition of GDP
  • The Agricultural Sector Industry
  • Expenditure Decomposition of GDP
  • Savings and Investment
  • Government Finance
  • Public Debt
  • The Balance of Payments
  • External Debt
  • Macroeconomic Balance
  • External Trade
  • Sri Lanka’s Competitiveness in the World Economy
  • Social Development
  • Concluding Note