Sri Lanka economy has recorded an annual average GDP growth of 4.8pct since 1977 to 2005. What was noticeable was that the 1977-2005 growth policies bypassed the rural areas. However, post-2009 Sri Lanka economy has remained consistently robust and has witnessed a stronger than average GDP growth of 7.5pct, outperforming many of its peers in the region. Today Sri Lanka stand tall as one of the fastest growing countries in the world, Sri Lanka has also embarked on ambitious plan of transforming its current GDP of USD 67 billion, reaching USD 185 billion and a GDP per capita of USD 8500, by 2020, as articulated by its Policy Document “Unstoppable Sri Lanka 2020”.
The new strategy integrates market economic policies while taking into account domestic aspirations where the state assumes a strategic investor role in the development process. Vision-2020 entails stimulating investment to the value of 33pct of GDP from 2016 to 2020, of which 7pct-8pct would be met by the state. Focusing on the 5 hub concept (Naval, Aviation, Commercial, Energy and Knowledge) the government endeavors to develop world class infrastructure in order to integrate all parts of the country thereby enhancing regional contribution to the economy, with time. The identifiable new growth areas are construction (infrastructure and mixed development), tourism, industrial manufacturing, IT/BPO, oil and gas, marine and aquatic and agricultural value addition industries.
The transformation from a low-income country to a middle-income country also brings with it many challenges and opportunities. The Government that once relied upon concessional funding and grants would now have to consider working with bilateral lenders and financial markets at more commercial rates than previously witnessed. This aspect is well recognized and fiscal measures have been put in place to ensure the Debt/GDP ratio remains manageable at 50pct by 2020.