As a result of the implementation of adequate laws and regulations by the central bank and government to support the Sri Lankan economy, the economy has shown some signs of adjustment. However, as the global economy recovered slowly and also due to adverse weather conditions, the economy grew more slowly compared to the previous year 2015. In this report, we analyzed the economic status of Sri Lanka in 2016 compared to 'year 2015. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get Original Essay Real Sector As indicated by the World Bank, Sri Lanka is a developing country with a growing annual economic rate. Following the end of the civil war in 2009, Sri Lanka has shown 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 service sector Adding over 60% of Sri Lanka's GDP as of 2016, the service sector contributes to a large extent to the country's output. As indicated by the Central Bank of Sri Lanka, financial services (12.4% increase), wholesale and retail trade (2.5% increase) and transport activities (4.1% increase) have played an important 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 has contributed to more than 30% of the entire economic output of Sri Lanka. With a contribution of over 17%, manufacturing activity played an important role in the industrial sector. Apart from this, the construction sector has contributed a lot to the industrial sector. This was mainly due to the end of the civil war which led to further construction. Other segments, such as mining and electricity, contributed less. Agricultural Sector Since the majority of Sri Lankans' livelihood is agriculture, it plays an important role in the Sri Lankan economy. However, the agricultural sector has shown negative growth this year. Mainly tea, rubber and rice showed negative growth. TeaSupply and demand side factors have contributed to the negative growth of the tea industry. Prolonged drought in tea growing areas at the beginning of the year 2016, climate change and severe drought conditions have had a negative impact on tea production. Low global product costs 2 and declining oil and gas revenues of major tea-importing nations have negatively impacted interest in tea in 2016. RubberDue to the reduction in the quantity under tapped and the number of tapping days. The decline in the area under exploitation is mainly due to competition for land to cultivate other crops and also to real estate problems. As global demand for rubber declined, rubber cultivation became less attractive because the profit margin was low. PaddyThe decline in paddy production is mainly due to few reasons. In the Maha season this happened due to a plant disease called downy mildew and leaf curl disease growing in some paddy production areas. In the Yala season this was mainly due to landslides and occurred widely due to strong tropical storms. Inflation Although inflation stabilized in the latter part of the year, consumer price inflation moved upwards during the first half of the year. Overall inflation, measured byyear-on-year change in NCPI was limited in the first quarter of the year due to low international raw material prices. However, inflation increased in the second quarter of the year, due to domestic supply disruptions. Mainly due to tax adjustments and adverse weather conditions. However, a decline in inflation was detected in the third quarter of the year due to the recovery of domestic supply and the halting of changes in the government's fiscal structure. Although the implementation of the new VAT rates put upward pressure on prices, inflation remained generally stable thereafter. Following a similar pattern, Colombo Consumer Price Index-based headline inflation ended the year at 4.6% at the end of 2016, after peaking at 5.8% in July 2016. A due to the effect of tax changes, drought conditions and the increase in international commodity prices also because they influenced the changes in inflation at the beginning of the year 2017. Foreign sector exports Maintaining the strength of development, the Export profits increased further maintaining double-digit growth. Compared to 2016, there is significant growth in 2017. This is mainly due to increased revenues from clothing exports to the EU and US markets. Earnings from agricultural exports have increased, especially tea exports, compared to last year, mainly due to rising tea prices, which have made Sri Lankan tea the most expensive tea in the world. For many reasons, such as adverse weather conditions, trade union activities leading to a demand has further reduced tea export earnings in 2016. Seafood export earnings grew significantly, mainly due to the lifting of the ban on exports of seafood products from Sri Lanka to the EU in June 2016. Imports Import consumption slowed in October 2017 mainly due to decreasing consumption of sugar imports due to reduced costs and, moreover, lower volumes. Fuel imports fell due to low volumes of unrefined oil imports, despite rising costs. Since January 2017, to meet the rice shortage in the domestic market, the volume of rice imports has increased. Financial flows The low level of FDI recorded by Sri Lanka in 2016 is expected to recover by early 2018. Sri Lanka reached $1.5 billion in foreign direct investment in 2017 and is expected to reach $2 . -3 billion from 2018 onwards. There are many reasons for the reduction of foreign direct investment in Sri Lanka, mainly due to the unstable political environment, but with the great development of the real estate sector, the government intends to fuel the development of the Sri Lankan economy through foreign direct investment . Many government policies such as the elimination of VAT on real estate transactions, the easing of cash restrictions and the proposed mortgage law have attracted the attention of foreign investors. Furthermore, Information Management Services recently released a report stating that Sri Lanka ranked among the top 10 foreign direct investment hotspots in the Asia Pacific region. According to Vision 2025, foreign direct investment will increase to $5 billion per year within the next three years. Balance of Payments Thanks to the efficient management of government revenues and expenditures, it was possible to achieve a.