Sri Lanka’s economy shows strong recovery with positive economic indicators

Sri Lanka’s economy is showing signs of recovery, with key economic indicators reflecting positive momentum as the country moves toward stabilization.

The Central Bank of Sri Lanka (CBSL) reported that the nation’s Official Reserve Assets stood at USD 6,462 million at the end of November 2024, marking a steady improvement.

Inflation Trends

The National Consumer Price Index (NCPI) continued to show deflation for the third consecutive month, recording a year-on-year deflation of 1.7% in November 2024, compared to 0.7% in October.

Food prices remained stable year-on-year, while the Non-Food category recorded a deflation of 3.1% in November. Central Bank Governor Dr. Nandalal Weerasinghe anticipates inflation stabilizing around 4-5% by mid-2025.

Stock Market Performance

The Colombo Stock Exchange achieved record-breaking growth. By December 27, 2024, the All Share Price Index (ASPI) increased by 4.89% to an all-time high of 15,535.60 points, and the S&P SL20 Index rose by 5.56% to 4,666.65 points compared to the previous week’s performance.

Budget Deficit and Currency Performance

Sri Lanka’s budget deficit reduced significantly during the first ten months of 2024, standing at Rs. 1,060.7 billion compared to Rs. 1,547.0 billion in the same period of 2023.

Meanwhile, the Sri Lankan rupee appreciated by 10.1% against the US dollar up to December 27, 2024.

Worker Remittances and Exports

Worker remittances reached USD 5,399.8 million in November 2024, reflecting a 10.1% increase year-on-year. Monthly remittances averaged USD 530.1 million, positioning total remittances for 2024 to surpass USD 6 billion.

Total exports for November 2024 were valued at USD 1,269.33 million, showing a slight increase of 0.04% from November 2023. Services exports grew significantly by 20.89% to USD 326.23 million, while merchandise exports declined by 5.6% to USD 943.1 million.

Tourism Sector Surges

Sri Lanka’s tourism industry exceeded expectations in 2024, with over 2 million arrivals by December, 2024 and total revenue reaching USD 2,806.5 million.

Monthly tourism earnings averaged over USD 270 million, placing total revenue for the year on track to surpass USD 3 billion, a 56% increase compared to USD 1,798.7 million in 2023.

Daily tourist arrivals averaged over 10,000, and total arrivals for 2024 are expected to exceed 2.1 million.

These encouraging developments highlight the steady progress Sri Lanka is making toward economic recovery and stability.