The lower-middle income group dominates Sri Lankan Economy. The economy of Sri Lanka is determined mainly by its political structure. The GDP of Sri Lanka was 40% during the sixties, reaching a height of 53.8% through the seventies, but unfortunately it slashed down to a paltry 9.7% during the eighties when the country was faced with an exigency due to the civil strife.
Prior to this Sri Lanka had a diversified economy. But post strife they faced a steady collapse of the flourishing economy. The Algiers is suffering from the burden of foreign debt and has gone into a pact with the IMF in April 1994. Post this pact the economy of Sri Lanka has again seen a growth, which has aided to improve the standard of living in the country.
Sri Lanka is mainly an agricultural nation, where the agricultural sector predominates. But, the industrial sector and the service sector constitute a major portion of Sri Lanka’s GDP or gross domestic product. In fact, the service industry contributes the maximum among the three sectors.
Agricultural sector in Sri Lanka Economy:
Sri Lanka exports agricultural produces like rubber, coconut, tea, coffee, cinnamon, cocoa, cloves, citronella, pepper, nutmeg, tobacco, cardamom etc. For domestic consumption, Sri Lanka grows food grains, various fruits and vegetables.
Industries And Sri Lanka Economy:
The industrial sector of Sri Lanka comprises of different industries like mineral industry, textile industry, food processing, petroleum, rubber processing and cement processing industry. The tourism industry is also a prominent revenue earner and provides employment opportunities to many people of Sri Lanka.
Owing to the presence of several harbors in Sri Lanka, trade occupies a very important place. The countries with which trade is carried out include India, Japan, United Kingdom and United States of America. Here, it can be mentioned that, Sri Lanka heavily banks on aid from foreign countries.
The main fields which contributed largely to the growth of service sector are Insurance, Banking, telecommunication and tourism. Sri Lanka started dealing with foreign banks since 1979. Insurance and offshore banking is also prevalent in Sri Lanka.
Last Updated on : 25th June 2013