Sri Lanka’s economic growth slowed slightly to 4.8% last year due to a fall in exports of its main commodity, tea, official figures showed.
The figure marked only a marginal decline on 2014, but will add to concerns after international lenders and ratings agencies warned the country is heading for a debt crisis.
Tea production dropped 2.6% during 2015 to about $545mn, the Department of Census and Statistics said in a statement, while exports fell by nearly 7% to 306mn kg (673mn pounds).
The declines were offset by services, which grew 56.6%, and industrial output, which expanded by 26.2%.
Last week the government announced a series of emergency tax increases to combat a debt crisis that has forced it to seek a bailout from the International Monetary Fund.
Prime Minister Ranil Wickremesinghe has put on hold for one year plans to lower corporate taxes, and has revived a capital gains tax abolished
in 1987.
The moves are aimed at repairing the economy, battered by mounting debt repayments that led ratings agency Fitch to downgrade Sri Lanka’s credit rating last month.
In a special statement to parliament, Wickremesinghe blamed the previous government for allowing debt to spiral, saying his ministers had uncovered $7bn in loans unaccounted for in the national budget.
However, the current administration embarked on a spending spree after taking power in January 2015 to deliver on election promises of higher wages and lower prices, increasing the deficit and sparking concern over the
balance of payments.
Last month Sri Lanka received pledges of over $2bn in loans and equity from the Asian Development Bank over three years.
It is in bailout talks with the IMF, although the sum it is seeking has not been disclosed.