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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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