• GDP: US$19.6 billion.
• Main imports: Textile fabrics, mineral products, petroleum, foodstuffs, machinery and transportation equipment.
• Main exports: Textiles and apparel, tea, spices, diamonds, emeralds, rubies, coconut products, rubber manufactures and fish.
• Main trade partners: China (PR), Germany, Hong Kong (SAR), India, Iran, Japan, Malaysia, Singapore, UK and USA.

Although some parts of the economy have suffered severe dislocation as a result of the civil war – especially the once promising tourist industry – Sri Lanka has managed to accommodate the conflict to the extent that the economy performed reasonably well during the last five years. This was reflected in the GDP growth rate of over five per cent in 2004. In the first quarter of 2005, GDP growth rate fell to under five per cent and inflation rose to over 10 per cent. The tsunami, in December 2004, unfortunately slowed economic growth, despite incoming foreign aid and assistance from the International Monetary Fund.
Agriculture sustains about one-third of the working population and directly contributes around 20 per cent of GDP. The main cash crops are tea, rubber and coconuts, which provide over 75 per cent of export earnings; rice is grown mainly for domestic consumption. Forestry and fishing are also important. The main industrial sectors are mining (gemstones and graphite being the principal minerals), and manufacturing. Iron ore, limestone, clay and uranium ore are also present in commercially exploitable quantities. Hydroelectricity is the main source of power, supplemented by imported oil. Important manufacturing industries include cement and textiles, both of which are valuable export earners.
In the service sector, the growth of tourism has been stunted by the civil war, but banking and insurance have both been performing well. Since the mid-1990s, successive Governments have followed the usual prescription of market-oriented policies – privatisation and deregulation – while seeking to build up potential export-earning industries. This strategy was slow to show results at first, but the Government persevered and some benefits are now beginning to materialise. The recent peace talks and ceasefire between Government and rebels has boosted business confidence both at home and abroad, and alleviated Sri Lanka’s chronic shortage of investment capital. The Government is now hoping to consolidate its progress by further deregulation, fiscal reform, and privatisation: although it has all but pulled out of manufacturing, the state still owns 90 per cent of the island’s land and the bulk of its utilities.

Business attire is casual. English is widely spoken in business circles. Appointments are necessary and it is considered polite to arrive punctually. It is usual to exchange visiting cards on first introduction. Office hours: Mon-Fri 0900-1700.

National Chamber of Commerce of Sri Lanka
450 DR Wijewardena Mawatha, Colombo 10, Sri Lanka
Tel: (5) 374 801-4.
Website: www.nccsl.lk

Ceylon Chamber of Commerce (Sri Lanka Tourist Hotels Association)
50 Navam Mawatha, Colombo 2, Sri Lanka
Tel: (1) 245 2183 or 232 9143.
Website: www.chamber.lk

Sri Lanka Convention Bureau (Information on Conferences/Conventions)
Hotel School Building, 4th Floor, 80 Galle Road, Colombo 3, Sri Lanka
Tel: (74) 713 500/1 or (1) 244 0002.
E-mail: slcb@sri.lanka.net