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Sri Lanka Table of Contents

Sri Lanka

ECONOMY

Gross Domestic Product (GDP): In mid-1980s, GDP rose incrementally at current and constant factor costs in spite of insurgency and domestic turmoil. Gross national product (GNP) increased from US$5.48 billion (US$349 per capita) in 1984 to US$5.71 billion (US$354 per capita) in 1986. GDP went from US$5.57 billion in 1984 to US$5.84 billion in 1986, with additional increase to US$6.08 billion (subject to revision) in 1987 and projected US$6.27 billion in 1988. Real (constant) growth rate dipped from 5.1 percent in 1984 to 4.3 percent in 1986, with a further estimated 1.5 percent decline for 1987. Reversal of trend expected in 1988, with increase to 3.5 percent growth.

Agriculture: Including forestry and fishing, agriculture accounted for slightly over 25 percent of GDP in 1982-86, but occupied nearly half of labor force during same period. Paddy (wet) rice main subsistence crop with two harvests a year; paddy hectareage and production have risen steadily since 1977; reached about 900,000 hectares under cultivation and 2.6 million tons harvested in 1986, making country about 75 percent self-sufficient in rice production. Principal commercial crops tea, rubber, and coconuts; tea production in the 1980s varied between 180 and 210 million kilograms annually; rubber production remained constant at about 140 million kilograms annually since 1983; coconut production rose by about 10 percent a year in 1980s, reaching a peak of slightly over 3 million nuts in 1986. Production of all crops dealt setback by drought in 1987, with recovery expected in 1988.

Industry: Contributes somewhat over 15 percent of GDP and occupies nearly 30 percent of labor force; major industrial output consumer goods, especially garments and textiles, and processed agriculture commodities. State plays major role in manufacturing sector, controlling some twenty large-scale enterprises and about fifty corporations; government committed to expanding role of private sector in developing nontraditional exports, import substitutes, and employment opportunities.

Energy: Firewood traditional source, accounts for 60 to 70 percent of energy consumption; main commercial/industrial sources hydroelectric and thermal power; installed capacity in 1986 slightly over a thousand megawatts. Accelerated Mahaweli Program, when completed, expected to provide extra 450 megawatts of power and render nation self-sufficient in energy production.

Services: Accounts for about 15.7 percent of labor force. Active tourism sector slumped badly because of widespread unrest in country after 1983.

Imports: Equivalent to US$1.95 billion in 1986. Major imported commodities include petroleum products, machinery, transportation equipment, food (including rice, wheat, flour, sugar), fertilizer, yarn, and textiles. Principal trading partners Japan, Saudi Arabia, and the United States. Imports from United States dominated by wheat, machinery, and equipment.

Exports: Equivalent to approximately US$1.4 billion in 1987; major exported goods ready-made clothing and processed agricultural commodities such as tea, rubber, coconuts, and spices. Dominant trading partner throughout 1980s the United States, which took US$350 million worth of goods in 1987, or fully 25 percent of all Sri Lankan exports.

Balance of Payments: Negative balance of payments throughout 1980s, but chronic trade deficit partially offset by foreign aid and remittances from abroad. Current account balance amounted to minus US$425 million for 1986, with minus US$357 million estimated for 1987. Total external debt for 1986 amounted to US$412 billion, with debt service ratio about 18.4 percent.

Exchange Rate: For five-year period ending in mid-1988, exchange rate of Sri Lankan rupee fluctuated, on average, less than ten percent annually against value of United States dollar. Most precipitous decline occurred from 1987 to 1988, when value of rupee fell from 26 (free rate) or 28.93 (official rate) to 32.58 (free rate) or 32.32 (official rate) per dollar.

Data as of October 1988


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Sri Lanka Table of Contents