Sri Lanka’s economy demonstrating the vulnerability to global and domestic disturbances grew by 3.2 percent in 2018 amidst a low inflation, The Central Bank said in its Annual Report for last year.
The Governor of the Central Bank of Sri Lanka Dr. Indrajit Coomaraswamy Thursday (5April) submitted the 69th Annual Report of the Monetary Board of the Central Bank to Minister of Finance Mangala Samaraweera.
Real GDP growth was recorded at 3.2 percent in 2018, compared to 3.4 percent in the previous year.
The growth was largely supported by services activities that expanded by 4.7 percent and the recovery in agriculture activities, which recorded growth of 4.8 percent.
Industry activities slowed down significantly to 0.9 per cent during the year, mainly as a result of the contraction in construction.
According to the expenditure approach, both consumption and investment expenditure supported growth. Investment as a percentage of GDP stood at 28.6 percent in 2018 compared to 28.8 percent in the previous year.
The total size of the Sri Lankan economy was estimated at US dollars 88.9 billion, while the per capita GDP was recorded at US dollars 4,102 in 2018, which was marginally lower than in the previous year.
Amidst the moderate growth in economic activity, a marginal increase in the unemployment rate and a decline in the labour force participation rate were observed during the year.
The trade deficit surpassed US dollars 10 billion for the first time in history with higher growth in import expenditure outpacing the growth in export earnings, which were at a record level in nominal terms.
The financial account benefitted from increased foreign direct investment (FDI) inflows which recorded its historically highest level in 2018.
Despite the sharp depreciation of the rupee and the introduction of the pricing formula for domestic petroleum price adjustments, headline and core inflation remained stable at low single digit levels during the year.
A summary of the performance of the Sri Lankan economy in 2018 as reflected in the Annual Report is given here
