Tourism as a Catalyst for Economic Growth: A Case Study of Sri Lanka

Abstract

By examining the effects of important variables including tourism, employment levels, foreign visitors, GDP, GDP per capita, and exchange rate variations, this research explores the factors that influence economic development in Sri Lanka. The study uses econometric modeling to assess the link between these independent factors and the dependent variable, economic growth, using time-series data from 2000 to 2023. The results show that tourism and foreign visitors have a major impact on economic expansion, which is consistent with the industry's vital position in foreign exchange profits. Additionally, there is a favorable association between employment levels and labor market efficiency. Overall GDP and GDP per capita show promise as measures of economic success, but exchange rate volatility has a mixed effect, highlighting the necessity for stable monetary policy. In order to guarantee continued growth in Sri Lanka, the report ends with policy suggestions to improve the country's tourist infrastructure, stable the currency rate, and promote inclusive economic development.