According to the International Monetary Fund, Sri Lanka’s GDP in terms of purchasing power parity is second only to the Maldives in the South Asian region in terms of per capita income.
In the 19th and 20th centuries, Sri Lanka became a plantation economy, famous for its production and export of cinnamon, rubber and Ceylon tea, which remains a trademark national export. The development of modern ports under British rule raised the strategic importance of the island as a centre of trade. From 1948 to 1977 socialism strongly influenced the government’s economic policies. Colonial plantations were dismantled, industries were nationalised and a welfare state established. In 1977 the Free market economy was introduced to the country, incorporating privatisation, deregulation and the promotion of private enterprise.
While the production and export of tea, rubber, coffee, sugar and other commodities remain important, industrialisation has increased the importance of food processing, textiles, telecommunications and finance. The country’s main economic sectors are tourism, tea export, clothing, rice production and other agricultural products. In addition to these economic sectors, overseas employment, especially in the Middle East, contributes substantially in foreign exchange.