Economy on a spurt
Significant tourist arrival
The year 2010 has ended with a bang showing that it was a year of
economic growth and development.
Good times ahead
* Eradication of terrorism paved way for
regeneration and resurgence
* Export earnings during 2010 increased by 13.2
percent to US $ 6.505 billion
* Textile and garment export earnings to EU and
US increased to 27.4 percent and 33.1 percent in October 2010
*Estimated to earn about US $ 600 million from
* Semi-skilled workers secured highest place in
foreign exchange earnings
* Estimated tourist arrival about 750,000 by
end of 2011
The eradication of terrorism and the end of the civil disturbances
during the last three decades which not only crippled the economic
growth and development but also acted as an impediment to investment and
production at optimum levels paved the way for regeneration and
The unfavourable economic conditions of Western countries affected by
the recession and high unemployment prevailing in those countries
brought more pressure on the country’s foreign exchange earnings as a
result of the dwindling numbers of tourist arrivals, diminishing of
foreign investment and aid for resettlement of the displaced persons in
the Northern and Eastern provinces.
Economic growth particularly in China and India and other Asian and
Middle East countries acted as a cushion to absorb a major proportion of
The need still exists for the government to move on more cautiously
in view of its external indebtedness, trade deficits, industrial unrest
punctuated by sudden strikes and extensive damages caused by recurrent
Trading at Colombo Stock Exchange. File photo
The external debt now stands at US $ 17.44 billion, according to the
latest estimates of the Central Bank.
The cumulative trade deficit during the first 10 months of 2010 was
US $ 4.357 billion though earnings from exports during this period
increased by 13.2 percent to US $ 6.505 billion while the cumulative
expenditure on imports, mainly of non-food consumer goods like cars,
increased by 32.8 percent to US $ 10.863 billion.
Despite the loss of GSP+ tariff concession in August 2010, the
earnings from textile and garment exports to the EU and USA in October
2010 increased to the tune of 27.4 percent and 33.1 percent
respectively. Besides, earnings from textile and garments, rubber
products, machinery and equipment, tea and rubber contributed mostly to
the growth in exports in October 2010.
Foreign remittances from those working in overseas countries
especially in the Middle East as skilled and semi-skilled workers
secured the highest place in foreign exchange earnings. During the first
10 months of 2010, the workers had remitted US$ 3.38 billion registering
a record increase of 21.9 percent over the corresponding period of 2009.
The tourism industry is almost competing with foreign remittances and
according to the Sri Lanka Tourism Development Authority, it is
estimated to earn about US $ 600 million with 600,000 tourists expected
to arrive in the country. This number is estimated to go up to about
750,000 by the end of 2011.
During January to November 2010, the number of tourists who visited
the country rose by 45.7 percent to 569,849 surpassing the previous
annual record of 566,202 in 2004. Revenue from tourism jumped 61.8
percent in the first 10 months of 2010 to a record $437 million,
breaking the previous record of $416.8 million set in 2004, according to
the Central Bank.
The gross official reserves remained above the targeted level and
stood at US $ 6.6 billion mainly due to the remittances from those
employed overseas and the revenue added by the tourist industry.
The contributions of the Fisheries sector to GDP, which is the third
most significant contributor to economic growth and second only to
agriculture and tourism, reached 18 percent in 2010 as a result of
renewed focus on the fishing industry.
Sri Lanka is one of the leading nations in yellow fin tuna market and
exports this species mainly to 27 European countries.
Census and Statistics Department
According to the Census and Statistics Department the overall
economic output is estimated at Rs 690.7 billion as against Rs 639.3
billion in the third quarter of 2009, registering an eight percent
growth rate which is the second highest ever recorded quarterly GDP
growth since 2002.
The International Monetary Fund (IMF) was confident that economic
conditions would remain strong and that the suggested 2010 deficit
target of eight percent of GDP would be achieved.
The other notable and significant feature was the recorded increase
in cultivated land in the Northern Province by 130,422 acres in 2010
bringing the total cultivated land to 221, 818 acres against 91, 396
acres in 2009.
With more extensive development programs in infrastructure,
agriculture, education and housing in the Northern Province and the
resettlement of remaining displaced persons in a couple of months, there
is no doubt that 2011 would really be a year of development that would
touch and benefit the entire nation.