According to provisional estimates of the Department of Census and Statistics (DCS), the Sri Lankan economy grew by 4.8 per cent, in real terms, in 2015 compared to 4.9 per cent in the previous year. The expansion of the economy in 2015 was mainly supported by services related activities, which grew by 5.3 per cent during 2015. Agriculture and industry related activities also contributed positively to the growth during the year, expanding by 5.5 per cent and 3.0 per cent, respectively. The growth in 2015 was largely driven by an increase in consumption demand, while investment activities witnessed a deceleration.

Headline inflation as measured by the year-on-year change in the National Consumer Price Index (NCPI, 2013=100) continued to decline for the third consecutive month, recording 0.1 per cent in October 2018, the lowest since January 2016. The deceleration observed in year-on-year inflation in October 2018 is mainly driven by the higher base prevailed during the corresponding month of the previous year due to higher food prices. Year-on-year Food inflation dropped for the third consecutive month and recorded -6.6 per cent in October 2018. However, year-on-year Non-food inflation continued to increase and reached 5.8 per cent during the month.

The change in the NCPI measured on an annual average basis decreased to 3.3 per cent in October 2018 from 4.0 per cent in September 2018.

Sri Lanka Prosperity Index (SLPI), increased to 0.771 in 2017 from 0.661 recorded in 2016, mainly due to improvements in ‘Economy and Business Climate’ and ‘Socio-Economic Infrastructure’ sub-indices. Economy and Business Climate sub-index has improved during 2017, due to increase in per capita Gross Domestic Product (GDP) and enhancements of the aspects associated with employment. With regard to the sub-index of Socio-Economic Infrastructure, improvements to the road network with the extensions to the expressways, construction of bridges and flyover projects, availability of electricity facilities and improvements in pipe borne water quality were the key drivers.

All the sub-indices of PMI Manufacturing recorded values above the neutral 50.0 threshold signalling an overall expansion in October compared to September. The improvement observed in manufacturing activities in October was mainly driven by the improvement in new orders and production, especially in manufacturing of food and beverages activities, led by the positive outlook with the seasonal demand. Even though the employment in the manufacturing of food and beverages activities has improved with seasonal trend, overall employment slowed down. This was mainly evident in manufacturing of textiles, wearing apparels, leather and related activities due to difficulties to find employees in the market.