Sri Lanka

FINANCE

Offshore fishermen on their perches near Galle
Courtesy Embassy of Sri Lanka

Coastal fishing fleet north of Colombo
Courtesy Embassy of Sri Lanka

After the early years of independence, the government consistently ran a budgetary deficit, which in the 1980s amounted to 15 percent of GDP. Foreign aid, which increased substantially after 1977, financed over 50 percent of the deficit in the 1980s and was essential for the health of the economy. Historically, a relatively high proportion of government expenditure was on social welfare programs, including health, education, and subsidized food, but after 1977 the importance of these programs, although still substantial by regional standards, declined. Banking and credit were dominated by government-controlled institutions, but the importance of the private sector in financial services was increasing.

Data as of October 1988