Sri Lanka

Sri Lanka: strong, sustained growth, 1980–2025

Decades of civil war until 2009 constrained growth; a subsequent construction and tourism-led expansion ended in a severe 2022 currency, debt, and political crisis that forced a sovereign default and IMF bailout. Between 1980 and 2025, Sri Lanka's GDP per capita grew from $271 to $5,002 (current US$), a compound annual growth rate of 6.7% — strong, sustained growth. Annual GDP growth averaged 4.3% with a year-to-year standard deviation of 3.1 points, reflecting relatively stable macroeconomic conditions. Structurally, agriculture's share of the economy moved from 27.8% to 8.4% of GDP (a classic decline as the economy industrialized/modernized), while services rose from 42.3% to 54.6% of GDP, underscoring a shift toward a services-driven economy. On human development, life expectancy rose from 68.0 to 77.7 years, while tertiary school enrollment moved from 2.9% to 20.7%, while the urban population share grew from 21.6% to 20.5%.

What this growth cost: Growth was not without cost: per-capita CO2 emissions rose from 0.28 to 1.06 tonnes CO2e per person; income inequality (Gini index) widened from 32.5 to 37.7; the poverty headcount ratio fell from 28.2% to 2.7%.