With the central bank and government implementing appropriate laws and regulations to revive the Sri Lankan economy, the economy has shown some signs of adjustment. Nevertheless, because the global economy recovered slowly and also due to unfavorable weather conditions, the economy grew more slowly compared to the previous year 2015. In this report we have analyzed the economic situation of Sri Lanka in 2016 compared to the year 2015. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay Real Sector As reported by the World Bank, Sri Lanka is a developing country with an increasing annual economic rate. Following the end of the civil war in 2009, Sri Lanka has experienced significant growth over the past 10 years. There are 3 main sectors that contribute to the Sri Lankan economy. These are the service sector, the industrial sector, the agricultural sector. The services sector, which accounts for over 60% of Sri Lanka's GDP as of 2016, contributes significantly to the country's production. As reported by the Central Bank of Sri Lanka, financial services (increase of 12.4%), wholesale and retail trade (increase of 2.5%), transport activities (increase of 4.1% ) have played a major role in the service sector. The growth of the financial sector is mainly due to the significant expansion of financial services. Industrial Sector The industrial sector contributed more than 30% of Sri Lanka's total economic output. Contributing more than 17%, manufacturing companies played a major role in the industrial sector. Apart from this, the construction industry has contributed a lot to the industrial sector. This was mainly due to the end of the civil war which led to more construction. Other segments like mining and power contributed to a lesser extent. Agricultural Sector Since the majority of Sri Lankans' livelihoods are based on agriculture, it plays a major role in Sri Lanka's economy. However, the agricultural sector has recorded negative growth this year. Tea, rubber and paddy mainly showed negative growth. TeaFactors, on both the supply and demand side, has contributed to the negative growth of the tea industry. Prolonged drought in tea growing regions in early 2016, climate change and severe drought conditions have negatively impacted tea production. Low product costs globally and declining oil and gas revenues of major tea importing countries have had a negative impact. influenced interest in tea in 2016. RubberDue to the reduction in the extent of bloodletting and the number of days of bloodletting. The decline in farm expansion under cultivation was mainly due to competition for land to grow other crops and also to real estate problems. Since the global demand for rubber has declined, rubber cultivation has become less attractive due to the low profit margin. PaddyThe decline in paddy production was mainly due to several reasons. During the Maha season, this happened because of a plant disease called blight and leaf curl that developed in some rice-producing areas. During the Yala season, this was mainly due to landslides and occurred on a large scale due to severe tropical storms. Inflation Although inflation stabilized during the latter part of the year,consumer price inflation increased during the first half of the year. Headline inflation, measured by the annual change in the NCPI, was moderate in the first quarter of the year due to weak international commodity prices. However, inflation increased during the second quarter of the year, due to domestic supply disruptions. Mainly due to tax adjustments and unfavorable weather conditions. Nevertheless, a decline in inflation was detected during the third quarter of the year due to the recovery of domestic supply and the cessation of changes in the government's tax structure. Although the application of the new VAT rates attempted to exert upward pressure on prices, inflation remained broadly stable thereafter. Following a similar moveAccording to the Colombo Consumer Price Index model, headline inflation based on the Colombo Consumer Price Index ended the year at a rate of 4.6% as of end of 2016, after reaching a peak of 5.8% in July 2016. Due to the effect of tax changes, drought conditions and increased international commodity prices. Prices also influenced the development of inflation at the beginning of 2017. Exports of the external sector Maintaining the development force, export profits have further increased, maintaining double-digit growth. Compared to 2016, 2017 saw significant growth. This is mainly due to higher revenues from clothing exports to the EU and US markets. Income from agricultural exports has increased, especially tea exports compared to last year, mainly due to the increase in tea prices, making Sri Lankan tea the most expensive tea in the world. Due to many reasons such as adverse weather conditions, labor union activities which lead to lower production and decrease in production. demand further led to a decline in tea export revenues in 2016. Seafood export revenues increased significantly, mainly due to the lifting of the ban on seafood exports from Sri Lanka to the EU in June 2016. Imports Import consumption slowed down in October 2017, mainly due to lower consumption of sugar imports due to lower costs and, furthermore, lower volumes. Fuel imports declined due to low unrefined oil import volumes, regardless of an increase in costs. Since January 2017, to fill the shortage of rice in the domestic market, the volume of rice imports has increased. Financial Flows Sri Lanka's record low FDI in 2016 is expected to recover by early 2018. Sri Lanka reached $1.5 billion in foreign direct investment in 2017 and it is expected to reach $2 billion dollars. -3 billion as of 2018. There are many reasons for the reduction in FDI in Sri Lanka, mainly due to the unstable political environment, but with the great development of the real estate sector, the government intends to boost development of the Lankan economy through FDI. Many government policies such as the elimination of VAT on real estate transactions, easing of liquidity restrictions and the proposed mortgage law have attracted the attention of foreign investors. Additionally, Information Handling Services recently released a report stating that Sri Lanka ranks among the top 10.