Sri Lanka’s economy is categorised as transitional and it falls into the lower middle income range. The nation has prioritised the manufacturing and service industries thus far. As seen by the recent growth rates of all important industries, including tourism, the government of Sri Lanka is currently reorganising in order to promote a stable economy and grow the country’s economy.

An economic strategy centred on trade, foreign direct investment, and the private sector has been given top priority by the government. Apart from the implementation of fiscal consolidation, which has demonstrated progress in reducing the budget deficit, the government has enacted a new Inland Revenue Act that has led to altered tax rates and a tax structure with three tiers. The most recent budget also eases limits on land ownership rights for listed firms owned by foreign entities.