Sri Lanka

In 2022, an economic crisis swept across Sri Lanka. The currency collapsed and inflation soared, fueling political unrest and a humanitarian emergency marked by severe shortages of essential goods. Since then, the economy has steadied somewhat, with tourism arrivals reaching record highs. Efforts to reposition Sri Lanka as a knowledge-based, export-oriented hub have also been revived.

Sri Lanka enjoys a strategic location at the crossroads of trade routes linking Asia and the Middle East, and boasts a diverse economic base spanning agriculture, manufacturing, construction, as well as finance, telecommunications and IT services. However, while potentially very attractive to foreign investors, the business climate in Sri Lanka also suffers from political influence, burdensome regulatory frameworks, and rigid labor regulations. The government’s high debt payments resulting from heavy reliance on imports and an inflated civil service, vulnerability to climate disasters, and ethnic tensions further compound Sri Lanka’s economic woes.