LKA Sri Lanka profile

Sri Lanka operates a presidential system with a strong executive, while parliament plays a substantial but sometimes contested role. Governance has been marked by cycles of political realignment, uneven policy execution, and concerns about transparency and accountability. Rule of law institutions face challenges in independence and capacity, and reforms aimed at decentralization and devolution have progressed unevenly. The media environment is variably free, with pressures that can affect scrutiny of official actions. Ethnic and religious dynamics influence political life, and reconciliation after protracted conflict remains an ongoing process. Bureaucratic inertia and patronage patterns hinder consistent service delivery and policy continuity across administrations.

Colonial history Colonized by Portugal, Netherlands, and Britain
Former colonizer United Kingdom
Government type Unitary presidential constitutional republic
Legal system Based on English common law and local laws
Political stability Moderate

The economy shows high external dependence and sensitivity to global developments. Fiscal and debt management have been fragile, with pressures on the currency and living costs. Agricultural policy shifts and subsidy changes have destabilized rural livelihoods and food security, while export oriented sectors such as garments and tea, along with tourism and remittances, face external and competitive challenges. The investment climate is affected by policy inconsistency, governance concerns, and gaps in infrastructure. There is notable potential in services, manufacturing, and agriculture, but structural constraints and external financing conditions shape growth prospects.

Currency name Sri Lankan Rupee
Economic system Mixed economy
Informal economy presence Significant
Key industries Textiles, agriculture, tourism, tea production
Trade orientation Export-oriented

Geography contributes to vulnerability to climate variability and natural hazards. Rainfall patterns influence water supply, food production, and energy generation, while extreme events stress communities and infrastructure. Coastal zones face erosion, sea level related risks, and climate impacts on fisheries and settlements. Deforestation and habitat loss affect biodiversity, with human-wildlife conflicts adding to risk for both people and wildlife. Pollution and waste management are ongoing urban and riverine challenges. Conservation and sustainable land use efforts exist but require coherent enforcement and community involvement.

Bordering countries None
Climate type Tropical
Continent Asia
Environmental Issues Deforestation, pollution, wildlife conservation
Landlocked No
Natural Hazards Floods, landslides, droughts, cyclones
Natural resources Minerals, gemstones, graphite, oil, hydropower, timber
Terrain type Flat coastal plain; Central highlands

The social fabric reflects a mix of ethnic and religious communities with a history of tension and cooperation. Access to quality education and healthcare varies by region, contributing to persistent inequalities. Migration and diaspora ties shape demographics and remittance flows. Gender equity exists in policy discourse but practical progress varies by sector and locality. Social protection systems face pressure from demographic and economic changes, and youth employment remains a concern in many areas. Reconciliation and justice processes after conflict are active, with civil society playing a role in accountability and human rights monitoring.

Cultural heritage Rich history with influence from ancient kingdoms and colonial past
Driving side Left
Education system type Free public education system
Ethnic composition Sinhalese, Tamils, Moors, Burghers
Family structure Nuclear and extended family systems
Healthcare model Public healthcare system with private options
Major religions Buddhism, Hinduism, Islam, Christianity
Official languages Sinhala, Tamil, English

Infrastructure development shows progress in urban areas, with improvements in transport, logistics, and facilities at major hubs, though rural regions lag in reliability and coverage. Energy dependence on imported fuels affects affordability and security, with occasional disruptions impacting households and businesses. Electricity provision can be uncertain, affecting continuity of services. Digital connectivity is expanding, yet a digital divide persists between urban and rural populations. Public services increasingly pursue digitization and e-governance, but implementation is uneven, and investment in water, sanitation, waste management, and climate-resilient infrastructure remains essential for inclusive growth.

Internet censorship level Moderate
Tech innovation level Developing
Transport system type Mixed (road, rail, air, and sea)

Development indicators

Indicator Year Value Rank 5Y Rank Change
Military expenditure (current US$) 2023 1,165,824,640 74 +14
Political Stability and Absence of Violence/Terrorism 2023 -0.509 145 +31
Regulatory Quality 2023 -0.508 131 +23
Rule of Law 2023 -0.0907 98 +8
Unemployment, total (% of total labor force) 2022 4.53 66 -29
Birth rate, crude (per 1,000 people) 2023 11.2 134 +18
Death rate, crude (per 1,000 people) 2023 8.2 67 -51
Exports of goods and services (% of GDP) 2024 19.9 114 -30
GDP per capita (current US$) 2024 4,516 119 -20
GDP per capita, PPP (current international US$) 2024 15,633 108 +1
High-technology exports (current US$) 2023 112,381,343 79
Imports of goods and services (% of GDP) 2024 22.5 118 -26
Inflation, consumer prices (annual %) 2024 -0.429 156 +106
Life expectancy at birth, total (years) 2023 77.5 76 -7
Mortality rate, under-5 (per 1,000 live births) 2023 6.1 127 0
Net migration 2024 -27,245 181 +2
Patent applications, residents 2021 266 52 +1
Population, total 2024 21,916,000 60 +3
Prevalence of undernourishment (% of population) 2022 4.1 80 -1
Renewable energy consumption (% of total final energy consumption) 2021 48.8 47 -5
Foreign direct investment, net inflows (% of GDP) 2023 0.85 136 +12
Current account balance (% of GDP) 2023 1.86 48 -48
Level of water stress: freshwater withdrawal as a proportion of available freshwater resources 2021 90.8 19 0
Total greenhouse gas emissions excluding LULUCF per capita (t CO2e/capita) 2023 1.74 158 0
Current health expenditure (% of GDP) 2022 4.36 144 -26
Domestic general government health expenditure per capita, PPP (current international US$) 2022 246 120 -2
Physicians (per 1,000 people) 2021 1.19 68 -16
Suicide mortality rate (per 100,000 population) 2021 14.7 30 +3
Individuals using the Internet (% of population) 2023 51.2 112 -20
Control of Corruption 2023 -0.384 113 +3
Government Effectiveness 2023 -0.252 113 +4
Research and development expenditure (% of GDP) 2022 0.105 70 -15
Logistics performance index: Quality of trade and transport-related infrastructure (1=low to 5=high) 2022 2.4 22

Demography and Health

Sri Lanka had about 21.92 million people in 2024, placing it among mid-sized populations in the region. Life expectancy at birth reached 77.5 years in 2023, reflecting steady health gains over time, while the birth rate stood at 11.2 per 1,000 people in 2023 and the crude death rate at 8.2 per 1,000, signaling a gradual aging of the population. The mortality rate for children under five was 6.1 per 1,000 live births in 2023, indicating improvements in child health yet leaving room for further reductions in under-5 mortality. Prevalence of undernourishment was 4.1% in 2022, suggesting that nutrition remains a public health concern for a minority of the population but is not among the most acute vulnerabilities in the region. Sri Lanka’s health system is financed with current health expenditure at 4.36% of GDP in 2022, and government health expenditure per capita at purchasing power parity (PPP) terms was 246 international dollars in 2022, pointing to a modest level of public investment in health relative to peers. The density of physicians stood at about 1.19 per 1,000 people in 2021, indicating a constrained health workforce relative to some comparators. Suicide mortality was about 14.7 per 100,000 in 2021. Net outward migration remained evident in 2024, with a negative net migration of roughly 27,245 people, underscoring ongoing labor mobility pressures that can affect the size and composition of the future workforce. Overall, health indicators reflect meaningful progress, but demographic and workforce dynamics pose ongoing policy challenges for sustaining gains in health outcomes and access.

Economy

Sri Lanka’s economy shows a mix of development indicators and vulnerabilities. GDP per capita (current US$) was about 4,516 in 2024, while GDP per capita (PPP, current international US$) stood at roughly 15,633, painting a picture of a lower-middle-income economy with substantial purchasing power in PPP terms. Inflation in 2024 registered a small deflation of −0.43%, indicating price declines rather than inflationary pressures at that time. The economy is moderately open, with exports of goods and services totaling about 19.9% of GDP in 2024 and imports at 22.5% of GDP, which implies a trade stance that is sensitive to global demand and exchange-rate movements. The current account balance was positive at about 1.86% of GDP in 2023, suggesting some external adjustment, while foreign direct investment net inflows amounted to 0.85% of GDP in 2023, signaling a modest but persistent inflow of capital. R&D activity remains limited, with research and development expenditure at 0.105% of GDP in 2022, and patent activity (266 resident applications in 2021) indicating room to scale up innovation. High-technology exports totaled around 112 million US$ in 2023, ranking Sri Lanka mid-pack internationally, reflecting a developing tech-oriented export base rather than a large advanced-manufacturing footprint. Social and institutional indicators of governance show weaknesses in regulatory quality (−0.508) and political stability (−0.509), with rule of law modestly negative (−0.0907), control of corruption (−0.384), and government effectiveness (−0.252). These governance readings suggest structural constraints on the business environment and policy credibility that can influence investment decisions and macroeconomic stability.

Trade and Investment

Trade and investment dynamics show a transition-focused economy with sizable openness but a persistent trade tilt toward imports. Exports of goods and services accounted for about 19.9% of GDP in 2024, while imports represented roughly 22.5% of GDP, indicating a modest trade deficit relative to domestic production that traders and policymakers must manage through diversification and productivity gains. The net inflow of foreign direct investment was 0.85% of GDP in 2023, signaling a cautious but ongoing interest from foreign investors, likely influenced by governance constraints and macroeconomic policy credibility. The current account balance stood at 1.86% of GDP in 2023, suggesting that despite import intensity, external financing and services remittances or capital flows helped sustain a degree of external equilibrium. Sri Lanka’s logistics quality (logistics performance index of 2.4 in 2022) points to middling efficiency in trade and transport infrastructure, which can affect competitiveness and time-to-market for both exporters and importers. In sum, while Sri Lanka remains an active participant in regional and global trade, enhancements in value addition, technology, and governance will be key to sustaining robust investment and export performance.

Governance and Institutions

Governance indicators in 2023 show notable challenges: political stability and absence of violence/terrorism scored around −0.509 (rank 145), regulatory quality around −0.508 (rank 131), and rule of law around −0.091 (rank 98). Control of corruption was −0.384 (rank 113), and government effectiveness −0.252 (rank 113). These readings reflect perceived governance weaknesses relative to many peers and can influence investor confidence, public policy credibility, and the quality of public services. While such indicators point to systemic risks, Sri Lanka has demonstrated capacity for reform in other periods, and lower-than-average governance stress in some domains coexists with these broader vulnerabilities. The data also shows that health and education-related public expenditure per capita remains substantial, illustrating a commitment to human development goals even as governance reforms proceed. Effective governance improvements—strengthening rule of law, anti-corruption efforts, and institutional quality—could unlock higher private investment, technology transfer, and more equitable growth.

Infrastructure and Technology

Infrastructure and technology indicators portray a mixed picture. Internet use reached 51.2% of the population in 2023, signaling growing digital connectivity but also a gap to universal access. The logistics performance index, measuring quality of trade and transport-related infrastructure, was 2.4 in 2022 (on a 1–5 scale with 5 being best), indicating room for improvement in ports, roads, and related services that underpin trade efficiency. Domestic innovation activity remains modest: R&D expenditure is 0.105% of GDP in 2022, and resident patent applications numbered 266 in 2021. High-technology exports stood at about 112 million US$ in 2023, underscoring a developing but still small role for advanced manufacturing in the economy. The physician density was 1.19 per 1,000 people in 2021, reflecting capacity constraints in health care infrastructure that interact with broader development goals. Collectively, these indicators suggest that Sri Lanka has begun embracing digitalization and some high-tech activity, but substantial investments in infrastructure, human capital, and innovation ecosystems are needed to lift productivity and resilience.

Environment and Sustainability

Sri Lanka faces significant environmental and sustainability challenges alongside encouraging signals. Renewable energy accounted for 48.8% of total final energy consumption in 2021, reflecting a strong role for renewables in the energy mix, which can help reduce vulnerability to fossil fuel shocks and support climate goals. Total greenhouse gas emissions per capita (excluding LULUCF) were 1.74 t CO2e in 2023, indicating a relatively low per-capita carbon footprint compared with many larger economies, yet climate change risks remain in a densely populated, resource-constrained island nation. Water resources are under heavy stress, with freshwater withdrawal at 90.8% of available resources in 2021, placing Sri Lanka among countries facing high water stress and highlighting the need for water management, efficiency, and resilience against droughts or floods. The prevalence of undernourishment is 4.1% in 2022, and life expectancy remains high at 77.5 years, suggesting that while nutrition and health outcomes are generally favorable, continued attention to food security and climate-adaptive policies is essential. Taken together, these environmental indicators point to a transition toward more sustainable energy and resource management, balanced against the challenges of climate vulnerability and water stress that demand integrated policy action.