Passing the crucial era of Sri Lankan economy timeline
Buddhika Dananjaya CMktr ,BA(Hons)(UK), DipM,ACIM(UK)
Premier Relationship Officer - Platinum Plus Branch | Financial Risk Management Branch Credit Officer
The old chronicle unveils that the old Sri Lanka had a self-reliant economy which the irrigation fed paddy agriculture was the main source of income. In the pre-colonial era, the period of King Parackramabahu Sri Lanka well recognized as “Peradiga Danyagaraya” (Granary of the east). In between 1505-1948 AD, the colonial period has been ruled by Portuguese, Dutch, and British, replacing many things for the economy
Sri Lanka is a being known as a Developing country since the day gains independence in 1948. With the 21.8Mn of the population and the island with the extent of 65,612Km2, alias Pearl of the Indian ocean has been classified as a lower-middle-income category by the world bank, with GDP per capita of 4,073 US dollars (2017).
Over the past 72 years, Sri Lankan economy has been affected by many reasons, introducing an open economy in 1977, over 30 years of civil wars in between 1983 -2009, Tsunami in 2004, Easter Bomb attack in 2019 and universal threat, Covid-19 pandemic in 2020, are some highlights in the past timeline. Due to the recent detrimental incidents which the country faced in 2019, the Easters bomb attack, Covid-19 pandemic, and collective leaderships which ruled for the last few years have declined the business confidence index of the country resulting, increasing external financial vulnerability, with massive fiscal deficits, and growing unemployment’s. As of 31st of July 2020, the inflation of the country has been increased to 4.2 % which was 3.9 in June 2020. The GDP growth rate has been declined by 2.4% to 2.0% ending 2019.
With the impact of COVID 19, the county is passing the crucial era of the Sri Lankan economy timeline.
GDP
By analyzing the above annual GDP growth rate, the contribution of agriculture to the country’s GDP has been drastically declined for the past few years, instead of that industry and services have been speedup aggressively. as well as in the current situation the industries and Services have also affected COVID- 19, which seems the negative impact of prioritizing industries and services sectors other than agriculture.
INFLATION
Since COVID resulted in large no of salary reduction and unemployment the countries headline inflation rose up to 6.3% in June 2020. Whereas the decline to 6.1 from July 2020.
To be continued
By Buddhika Dananjaya