Sri Lanka has attracted USD 1,547 million in Foreign Direct investment (FDI) in 2023 (up to November), said State Minister of Investment Promotion, Dilum Amunugama at a media briefing on Friday.
He said a further USD 258 million was made by local investors raising the total investment for 2023 to 1,805 million. “This shows that foreign investors are still keen to invest in Sri Lanka despite so many negative factors that happened in the previous year. It is also pleasing to note that investors are not shunning Sri Lanka.”
“Despite external and internal setbacks, the BOI achieved 1.8 billion in investments with signed and approved projects totalling U$ 1.5 billion,” Amunugama said.
The baseline forecast is for global growth to slow from 3.5 percent in 2022 to 3.0 percent in 2023 and 2.9 percent in 2024, well below the historical (2000–19) average of 3.8 percent.
Due to the Ukraine-Russia war, the US, and UK inflation is historically 40-45%. Further negative influences due to the Israeli and Palestinian conflict will have repercussions on energy price escalation.
In the context of the Internal macroeconomic situation, our country’s rating, the default of paying debtors, and political uncertainty send a less investor-friendly signal to the outside world at the beginning of 2022. Yet in 2023 the economy was slowly but steadily pulled back from the worst economic situation post-independence era.
The Government’s far-sighted and politically unpopular economic stabilisation measurement has provided a much-needed foundation for reforms in the institutional and regulatory front, hence it has communicated positive signals to our investor community. The significant achievement of curbing the acceleration cost of living which has resulted in the single digit of inflation from 74% in September 2022 to 1.5 % in October 2023
Yet as an economy, it will continue to contract in 2023, it was better than -7.8 in 2022 but in 2023 it has forecasted -2.0 negative growth. it is an arduous task to attract FDI amid economic contraction. Yet, in the YOY comparison, BOI registered and approved FDI Investment projects increased by 122% in 2023.
The significant increase in projects is due to the high value of investment in the energy sector. Investments such as Adani Corporation, Sinopec, RM Parks with Shell, and further sectors such as ITC, BPO, Tourism, and Manufacturing are the sectors getting more investments.
Countries such as China, India, the US, HK, UAE, France, Korea, Germany, and Singapore are the destinations invested during 2023.