E3 Journal of Business Management and Economics

E3 Journal of Business Management and Economics Vol. 3 (8) pp. 307-317, August 2012; © E3 Journals; ISSN 2141-7482

Growth performance and forecasts of FDI inflows to Sri Lanka

Abstract

Sri Lanka has strived hard to launch its economic reforms that favoured a greater role to FDI. The present study is an attempt to find the growth performance and forecasts of FDI inflows to Sri Lanka. The study concludes that Sri Lanka has not been able to attain the growth rate which can match the growth rate of FDI inflows to South Asia. South Asian aggregate FDI inflows have registered a growth rate of 24.58 percent during the period of 1991-2010. But, the growth rate in case of FDI inflows to Sri Lanka is as low as 9.31 percent. It means that its counterparts South Asian countries like India, Pakistan, and Bangladesh have registered higher growth rate than Sri Lanka. Keeping in view the past trends and future projections, Sri Lanka needs to put in place a comprehensive development strategy which includes being wide open to FDI. Efforts must be made to ensure that the actual inflows do exceed the forecasted figures

Keywords: Double Exponential smoothing; L-jung Box Q statistic; Forecasts,CAGR; Autocorrelation coefficient