Sri Lanka

Sri Lanka became a full member of SASEC in May 2014, together with the Maldives, following several years as an active Observer. Bangladesh, Bhutan, India, and Nepal formed the project-based partnership in 2001.

The Progress Report of the Ministry of National Policies and Economic Affairs for the Year 2015 and Development Program for the Year 2016 of the Government of Sri Lanka highlights the Government's aim to put into place strategies to implement its five-pillar development plan to build the economy, fight corruption, ensure freedom for all, develop infrastructure and investment, and improve education. To achieve the goal of improving and enhancing the living standards of the people, the Government is introducing key economic policies that will enhance competitiveness of the Sri Lankan market, and establish mega zones to boost technology and industrial development.

SASEC Technical Assistance in Sri Lanka

ADB-financed technical assistance has supported SASEC activities in Sri Lanka since 2002, to help advance the country's engagement in regional cooperation activities, including under the South Asian Association for Regional Cooperation (SAARC) and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) frameworks. Sri Lanka has actively participated in SASEC regional technical assistance projects from 2012 to 2014 as Observer, and then as full member. A total of five technical assistance projects worth $15.66 million have supported regional cooperation forums, knowledge-sharing initiatives, and capacity building in Sri Lanka.

Trade Snapshot

Direction of Intra-regional Trade

The value of Sri Lanka's merchandise exports and imports trade with other SASEC member countries, using International Monetary Fund data from 2017, is captured in the tables below.

India is Sri Lanka's top import source worldwide, with imported goods valued at over $4.6 billion.

India ranks 3rd as Sri Lanka's top export destination, with exported goods from Sri Lanka valued at $649 million.

Sri Lanka Trade in SASEC Subregion Source: IMF Direction of Trade Statistics, as of May 2018

Sri Lanka Trade - Import

Source: IMF Direction of Trade Statistics, as of May 2018

Sri Lanka Trade - Export

Source: IMF Direction of Trade Statistics, as of May 2018

Ease of Doing Business

In 2018, Sri Lanka implemented a National Single Window for Customs that made it easier to trade across borders.

Source: Doing Business, as of April 2018

Note: The World Bank/International Finance Corporation's annual flagship Doing Business Report measures the ease of doing business by ranking economies from 1 to 189, based on quantitative indicator sets that can be compared across economies and over time, with first place being the best and indicating a regulatory environment is conducive to business operation. Of immediate relevance to SASEC aims and goals are indicator sets on Starting a Business, and Trading across Borders.

Logistics Performance Index (LPI)

Sri Lanka’s 2014 overall LPI score slipped slightly to 2.70, after posting a high of 2.75 in 2012, yet stayed ahead of the South Asia 2014 average score of 2.61. This ranks the country at 89 out of 160 countries for 2014, compared to 81 for 2012. Sri Lanka’s areas of improvement in 2014 were logistics competence, tracking and tracing, and timeliness.

Sri Lanka LPI 2016

Source: World Bank LPI

Note: The LPI overall score reflects perceptions of a country's logistics based on six core dimensions: (i) efficiency of customs clearance process, (ii) quality of trade- and transport-related infrastructure, (iii) ease of arranging competitively priced shipments, (iv) quality of logistics services, (v) ability to track and trace consignments, and (vi) frequency with which shipments reach the consignee within the scheduled time. The scores for the six areas are averaged across all respondents and aggregated to a single score using principal components analysis. A higher score indicates better performance.

Sri Lanka LPI 2007-2014

Source: World Bank LPI

Economic Outlook

Asian Development Outlook

Growth in 2017 slowed to a new low since 2001 as agriculture contracted and industry and services slackened. Inflation surged briefly, and the current account deficit widened. The outlook is for gradually improving growth as structural reform addresses major fiscal and external imbalances. Dealing with the weak performance of state-owned enterprises is a major component of the revenue-based fiscal consolidation to achieve durable and inclusive growth.

Source: Asian Development Outlook 2018 (ADB)
South Asia Regional Update

Contracting agriculture supply in 2017 pulled down GDP growth to 3.3% year on year. Growth in 2018 is expected to be driven by manufacturing, construction, and services, as agriculture supply recovers from the effects of weather-related shocks. Inflation is expected to stabilize to mid-single digits in 2018.

Source: South Asia Regional Update, January 2018 (IMF)