The free-market economy of Sri Lanka is worth $88.9 billion by nominal gross domestic product and $291.5 billion by purchasing power parity. The country has experienced an annual growth of 6.4 percent from 2003 to 2012, well above its regional peers.

Recent Macro

Recent Macro

  • Gotabaya Rajapaksa was elected president in 2019, a strong supporter of the tourism industry in Sri Lanka with an open door policy to foreign investment

  • GDP Growth Rate in Sri Lanka averaged 5.88% from 2003 until 2017, reaching an all time high of 16.10% in the first quarter of 2012 and record low of 0.50% in the fourth quarter of 2013

  • Real GDP growth is expected to rebound to 3.4% in 2020, from an estimated 2.5% in 2019

  • Sri Lanka ranked 99th in the World Bank’s Ease of Doing Business Index

  • The Gross Domestic Product pr capita in Sri Lanka was last recorded at US$ 3,936 in 2018

  • GDP per capita in Sri Lanka averaged US$ 1,562 from 1961 until 2018 (source: World Bank)

 

Key Info

Key Info

Currency

  • Currency of Sri Lanka is the Sri Lankan Rupee (LKR)

Climate

  • Tropical and hot climate with distinct wet and dry seasons in the north and east coast and the south and west coast 

  • Coastal areas enjoy temperatures between 28-32°C (82-89°F) while upland areas are cooler and more temperate - yearly average around 16-20°C (60-68°F)

  • South-west wet season is May - September, dry season is December - March

  • North-east wet season is October - January, dry season is May - September

Tax

  • Withholding tax is currently 10% for foreigners
Hospitality

Hospitality

  • Travel and tourism contributed 5.1% towards GDP in 2016/17. This is forecast to grow to 6.6% by 2027

  • Tourism is the third largest foreign exchange earner in Sri Lanka and the industry grew 3.2% in 2017 (latest figures) compared to 2016

  • Tourist arrivals reached a record high of over 2.3 million in 2018. Levels fell in 2019 due to the Easter Sunday terror attacks but are forecast to bounce back in 2020 (notwithstanding the impact of Corona)

  • Revenue in the Hotels segment is forecast to amount to US$ 153m in 2020

  • The average revenue per user (ARPU) currently sits at US$ 110
Property

Property

  • The housing market is experiencing a current boom, amidst a surging tourism sector, coupled with weak residential construction activity

  • House prices grew 17% during 2018

  • Foreigners may own freehold title on condominium apartments

  • Land can only be leased up to 99 years

  • Stamp duty is 4% and legal fees are around 1-2%

  • VAT on new apartment sales was reduced to 0% in 2020
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