Basic info

Overview
Past name: Cylon
Independence date:4 February,1948
Present name: Sri Lanka (1972)
Dimension: 65,610 square kilometers
Population: 2.30 crore+
Urbanization rate: 1.22%
Per capita: $3815
Country: south Asian
Literacy rate 95%
Inflation 17.50%
1 dollar= 307 Sri Lankan rupee
Foreign exchange reserve= 2.31 Billion
Default announce date= April 12,2022
Default announce reason= unable to pay external debt is worth around $51 billion
 MEGA projects: Hambantota Sea port, Hambantota airport,wind power generation
project, Havana Vyando transmission line project, Bandaranaike International airport
development project, Colombo Pot city development Project
Export : 11.94 Billion USD(2019) ; 10.04 Billion USD (2020), 12.5 billion USD (2021)
Remittance: 7+ Billion USD (2016-2018), 6.7 Billion USD (2019), 7+ Billion USD (2020),
5.4 Billion USD (2021)
Tourism: 4.3 Billion USD (2018), 3.6 Billion USD (2019), 682.4 Million USD (2020),
506.9 Million USD (2021)
Foreign Reserve: 8.2 Billion USD (2014), 1.93 Billion USD (2022)
Sri Lankan Rupee fell against USD: 45%
 According to world bank:
GDP growth in 2012: 9%
GDP growth in 2013-2019 decreased in average: 4%
During Corona GDP growth: -3.6%
PUBLIC DEBT against GDP: 94% (2019), 119% (2021)
According to IMF: GDP growth is projected to be negatively affected by the impact of foreign exchange
shortage
 Reasons behind the economic crisis
1. Borrowed foreign debt for non profit projcets
2. Reduced food security by mandatory organic farming
3. Unable to overcome COVID-19 effect
4. Establishing mega projects based on debt
5. Unable to generate revenue from non profit projects though expenses were huge.
6. Unable to repay foreign debt
7. Unable to generate revenue because of less demand of services
8. From 2007, sri lankan govt was issuing international sovereign bond which worth $12.5 Billion USD and didn’t think about how to
repay
9. In 2019, Sri lankan president reduced vat/tax from 15% to 8%
10. Govt expected economic growth after reducing vat/tax but actually the revenue reduced by 25%
11. As revenue reduced ,govt had to take more debt
12. During corona the source of revenue like tourism, export, remittance got stopped.
13. Political unstability
14. Security risk fell tourism down.
15. People who worked abroad, lost their job due to covid crisis and came back
16. Collapsed export sector due to covid
17. Sudden change in agriculture which contributed 8% of GDP regularly in past
Segments of reason ( individual slide requires)
1.Loan repayment
2. Foreign remittance decrease
3. Failure to attract foreign direct Investment
4. The collapse of tourism
5.Export earnings decrease
6. Political unstability
7. Change in the policy of agriculture
8. Reduced VAT/ TAX
9. Covid-19 effects
 According to bbc
Sri Lanka will be required to pay
$7Billion to service its debts, $ 1.5
billion of which is from Sovereign
Bond, with similar amounts for years
to come
 Results:
1. Inflation rate increased
2. Increased import
3. Increased price of product
4. Unemployment
5. Increased proverty