The Main Determinants Affecting Economic Growth in Sri Lanka

Abstract

Every country in the world is trying to create a self-sufficient economy through economic growth and economic development. The concept of economic growth is very important there. There are many determinants that a country must achieve in order to achieve economic growth. Accordingly, this study studied the determinants that determine economic growth in Sri Lanka. It considered how the determinants of Exports, Foreign Direct Investment Inflow, Savings and Population Growth affect economic growth. For that, the research was conducted using secondary data related to the period 1991-2020. The Ordinary Least Square (OLS) method was used to identify the relationship between the determinants used and economic growth. Accordingly, it was identified that the factors of foreign direct investment and savings have a positive effect on economic growth, and the factors of Exports and Population Growth have a negative relationship with economic growth. Accordingly, it is important to pay close attention to foreign direct investment and savings in Sri Lanka moving towards economic growth.