Tourism and the bullish case for the Rupee
The pessimism around the Sri Lankan economy and its currency continues for another year. FDI inflows are sluggish at sub $1B, exports are stagnant at 13% of GDP, and total external debt levels are 10% higher at $26B. These indicators, coupled with the government's inability to push liberalization policies through interest groups, such as the GMOA and the ports union, have dented business confidence, doomed Sri Lanka for a consecutive year of below 5% GDP growth and depreciated the Sri Lankan Rupees 6% against the dollar on a rolling 12-month basis. In the midst of the gloom, however, there is a bright spot in the economy which has the potential to propel its currency to a greener pasture largely unfettered by the woes of the rest of the country. That is the tourism sector. The tourism industry in Sri Lanka is in a self-perpetuating cycle of growth. Despite the lack of an extensive government or private sector-led advertising campaign, the travel sections of media outlets, such...