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Dilemmas of 'hurting economies' - the case of Sri Lanka
Maldives President Dr. Mohamed Muizzu was in Sri Lanka recently on what was apparently a goodwill visit and this event, no doubt, bodes very well for Maldives-Sri Lanka relations. Besides, the visit would go some distance in strengthening Sri Lanka’s claims to Non-Alignment. However, the commentator on regional politics could be accused of simplistic thinking if he/she glosses over or ignores the regional politics nuances or undertones of the Maldivian President’s visit. In Sri Lanka we currently have a government which is eager to solidify its bridges, so to speak, with China and which, given the chance, would be courting increasingly close relations with Russia. In other words, the NPP government is likely to see itself as a ‘natural ally’ of the East and would prefer to distance itself to the extent possible from the West, if that is a realistic proposition. Given the foregoing backdrop, it would be in some of the NPP regime’s best interests to be on cordial terms with the Maldives which is a close ally of China in the South Asian region. However, the NPP government, given the utter financial helplessness of Sri Lanka, cannot afford to distance itself politically and diplomatically from India and the West. Sheer economic necessity compels Sri Lanka to adopt this foreign policy stance. In other words, the latter has no choice but to be ‘Non-Aligned.’ This columnist was led to the above observations on listening to a lucid and comprehensive presentation titled, ‘A Global Economy in the Shadow of the Iran War and implications for Sri Lanka’s debt recovery’, by Dr. Ganeshan Wignaraja, Visiting Senior Fellow, ODI Global London, at the Regional Centre for Strategic Studies (RCSS), Colombo on May 4th. The forum, RCSS Strategic Dialogue – 4, was moderated and presided over by RCSS Executive Director Ambassador (retd) Ravinatha Aryasinha. The forum brought together a wide cross section of society, including diplomatic personnel, academicians, public and private sector personalities and the media. After the presentation a very lively and informative Q&A followed. Ambassador Aryasinha at the outset set an appropriate backdrop to the presentation and discussion by stressing ‘the increasing interconnectedness of geopolitical and economic developments, noting how disruptions in the Middle East could have significant ramifications for global markets, trade flows, energy prices and broader economic stability, including Sri Lanka.’ Indeed, there are occurring currently ...
Economy of Sri Lanka - Wikipedia
Economy of Sri LankaColombo, the financial centre of Sri LankaCurrencySri Lankan rupee (LKR, Rs)Fiscal yearCalendar yearTrade organisationsWTO, WCO, SAFTA, IOR-ARC, BIMSTEC, AIIBCountry group Developing/Emerging[1] Upper-middle income economy[2] StatisticsPopulation 21,756,000 (2025)[3]GDP $108.8 billion (nominal, 2025)[4] $342.6 billion (PPP, 2024)[5] GDP rank 71st (nominal, 2024) 62nd (PPP, 2024) GDP growth 5.0% (FY2024)[6][5] 5.0% (FY2025)[7] 4.8% (4Q 2025)[8] GDP per capita $5,003 (nominal, 2025)[4] $15,632 (PPP, 2024)[9] GDP per capita rank 120th (nominal, 2024) 111th (PPP, 2024) GDP by sector Agriculture: 7.5% Industry: 26.7% Services: 59.2% (2024)[6]Inflation (CPI) 1.60% (February 2026)[10]Population below poverty line3.5% lived on less than $4.20/day (2019)[11] 22% lived on less than $8.30/day (2019)[12]Human Development Index 0.776 high (2023)[13] 89th 0.630 medium (IHDI) Corruption Perceptions Index 48 out of 100 points (2025, 97th rank)Labour force 8.554 million (2025 est)[4] 49.4% participation rate (2025 est)[4] Labour force by occupation agriculture: 26.4% industry: 25.4% services: 48.3% (2024-3Q)[14] Unemployment 4.7% (2023) 4.4% (2024) 3.9% (2025)[4] Main industriestextiles & clothing, tourism, telecommunications, information technology services, banking, shipping, petroleum refining, construction and processing of tea, rubber, coconuts, tobacco and other agricultural commoditiesExternalExports $17.2 billion (2025)[15] Export goodstextiles and apparel, tea and spices, IT services, rubber manufactures, Electrical and Electronic Equipment, Fish, Seafood and Aquatic Products, Gems and Jewellery, Processed food and fruitsMain export partners USA 25.29% UK 9.18% India 6.09% Germany 5.75% Italy 5.35% (2020)[16] Imports $21.480 billion (2025)[4]Import goodsMineral fuels including petroleum product (12.3%)Machinery including computers (9%)Electrical machinery, equipment Vehicles (7.1%)Textile fabric (5%)Plastics (3.7%)Cotton (3.3%)Heavy metals (3%)Ships and boats (2.8%)Iron, steel, aluminium (2.8%)Main import partners China 22.96% India 19.30% USA 5.57% Malaysia 4.08% Singapore 3.96% (2020)[16] FDI stock US$13.05 Billion (2019)[17] Abroad: NA[18] Current account $1.719 Billion (2025)[4] +1.6% of GDP[4] Gross external debt $37.6 Billion (34.6% of GDP) (2025)[4]Public financesGovernment debt $99.6 Billion (91.6% of GDP)(2025)[4]Foreign reserves $7.2 billion (February 2026)[19] Budget balance− 5.1% (of GDP) (2026)[20]RevenuesRs 5,305 Billion (2026 est...
Sri Lanka's recovery in question as economist challenges IMF narrative
Sri Lanka's economic outlook remains cautiously optimistic but fragile. Continued reform implementation, debt restructuring, and external support will be critical in sustaining progress. Whether the country can transition from stabilization to a broad-based recovery - one that is felt across society - remains an open question.
Continuing West Asian war deepens global economic crisis, hits Sri Lanka
This is the international dilemma. The global economic crisis threatens the trade- and tourism-dependent Sri Lankan economy in several ways, as was discussed in last Sunday's column. Global recession The IMF has predicted a global economic recession if the current international conditions continue.
