Sustainable Trade Index 2023

Pillar-by-pillar analysis

Sri Lanka dropped to the bottom of the ranking (from 26th) in this pillar as a result of feeble performance in consumer price inflation, real GDP growth, and trade liberalization. Other poor indicators were in labor force growth (15th to 29th, at -1.08% of the population), monetary policy intervention (fourth to 14th), and tariff and non-tariff barriers (12th to 19th). Despite improvements in foreign direct investment (24th, at 0.67% of GDP), exchange rate stability (27th), and foreign trade and payments risk (29th), the country’s performance in these indicators remains insufficient. Sri Lanka stays in 19th place in domestic credit to the private sector (49.82% of GDP) and in 12th in export concentration. We observe from the overall results in the economic pillar results overall that countries that improved show robust performances in technological innovation and infrastructure, trade liberalization, levels of financing for the private sector, and falling trade costs. Conversely, most countries that experience declines in this pillar are negatively affected by inflation, slow economic growth, and high foreign trade and payment risks. In addition, they are slow to liberalize trade and don’t export much.

Figure 9 Relationship between economic pillar rankings and GDP per capita

HINRICH-IMD SUSTAINABLE TRADE INDEX 2023

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