Sri Lanka hits 5% growth in 2024

• Economy expands 5.4% in 4Q24
• Per Capita income grows to US$ 4,516 in 2024
• Industry led 4Q GDP grew by 13.1% & services by 2.5%
• Agriculture shrank 2.2% reflecting year-end troubles in the sector

In another reaffirmation of the strength of the ongoing economic recovery since the country fell into its economic depths back in 2022, Sri Lankan economy has recorded an estimated 5.4 percent growth in its economy in the fourth quarter of last year bringing the full year growth to the expected 5.0 percent in 2024.

According to the Gross Domestic Product (GDP) estimates published by the Census and Statistics Department, the fourth quarter marked the highest rate of growth since the current recovery took off six quarters ago in the third quarter in 2023.

In US dollar terms, Sri Lankan economy was of the size of 98.98 billion by the end of 2024.

Further, the 2024 GDP growth is also the highest since 2014, when the economy grew by 5.0 percent. During that period the Sri Lankan economy was bustling with broad set of activities and expansion with sharp increase seen in the people’s incomes and economic wellbeing in a short span since the end of the war in 2009.

The per capita income too rose to US$ 4,516 or Rs.1,364,235 in 2024, the first time the country managed to record a per capita income in excess of US$ 4,000. The appreciation of Rupee against the US dollar also helped higher US dollar incomes for the people in 2024 as the Rupee strengthened by about 10.0 percent, after rising by 12.0 percent in 2023.

The sharp expansion in the economy was attributable to many factors from the availability of once again the foreign currency, which ran out in early 2022. 

The higher pace of growth was possible mainly from the lower base the Sri Lankan economy had from 2023 after two consecutive years of decline.

The economy had its worst decline since its post-independence history in 2022 when growth fell by 7.3 percent before containing the contraction to 2.3 percent in 2023.

“After the two declined GDPs in 2022 and 2023, Sri Lanka’s economy recorded a positive growth rate in the year 2024, paving the way for more positive expectations to come,” Census and Statistics Department said releasing their fourth quarter GDP estimates yesterday.  

“By facilitating and benefitting from these expansions of the economy, both export and import volume indices had shown remarkable increases throughout the year 2024 with increased container and cargo handling in the ports of Sri Lanka”, they added. “With the tendency to reduce interest rates, simultaneous increase in domestic credit was seen which created more liquidity in the economy especially on the hands of private institutes and individuals,” they explained the reasons for the current recovery in the economy.

The fourth quarter GDP growth was underpinned mainly by the industry and the services sectors which grew by 13.1 percent and 2.5 percent respectively followed by a 15.7 percent increase in the taxes less subsidies category. But as evidenced from the troubles seen in the agricultural produce since the latter part of last year, the agriculture segment contracted by 2.2 percent.

But all four components grew for the full year with each growing by 11.0 percent, 2.4 percent, 10.3 percent and 1.2 percent respectively.

Meanwhile, the four segments contributed to the economy with 26.7 percent share by the industry, 59.2 percent by the services, 6.6 percent by the taxes less subsidies on products and agriculture with a share of 7.5 percent.