Annual Report 2010 - Ministry of Finance and Planning

Ministry of Finance and Planning Sri Lanka > Annual Report 2010Box 1.11Changing Consumption Patterns of Sri LankaSri Lanka has been able to achieve a per capita incomeof USD 2,399 (Rs. 271,259) in 2010. In 2010, Sri Lanka alsograduated to middle-income status from the list of PovertyReduction and Growth Trust of the IMF. In line with thechanging income status, graduation to a middle incomestatus is further corroborated by the changing food andnon-food consumption behaviour of the Sri Lankans.In broader terms, it is apparent that the relative shareof the total expenditure spent by an average householdon food items is in the decline. As evident from theperiodical household surveys, the food ratio, which stoodat 65 per cent in 1980/81, has declined to 42.3 percent in2009/10 reflecting emergence of diverse consumptionpatterns among Sri Lankan people.Percent706050403020100Chart 1.65 > Food Ratio1980/81 1985/86 1990/91 1995/96 2002 2005 2006/07 2009/10 2010300025002000150010005000US$Food RatioGDP Per Capita (US$)Source: Household Income and Expenditure Surveys, Dept. of Census and StatisticsThe decrease in food ratio is a direct realization ofan increased proportion of expenditure being spenton non-food items by the Sri Lankan consumer. Suchmovements in consumption expenditure could beviewed in the light of Sri Lanka’s growth in per capitaincome which stood at USD 2,399 in 2010 vis à visUSD 285 in 1980/81 thus enabling consumers to spendmore on non-food items viz. housing, personal careand health, education and other social and culturalactivities.129