IMPACT OF INFLATION, FOREIGN DIRECT INVESTMENT AND POPULATION GROWTH ON ECONOMIC GROWTH: AN ANALYSIS OF SRI LANKA ECONOMY

Abstract

Economic growth of a country is determined by several factors. Managing the factors that affect the economic growth is essential. Recently economy of Sri Lanka has been facing economic crisis. It is necessary to identify which factor affect most and how it is influences on economic development of a country in order to decision making. Inflation, foreign direct investment and population growth plays major role in economic growth of the country. This study investigated effects of inflation, foreign direct investment and population growth on economic growth in Sri Lanka during the time frame of 1973 to 2022. Annual data garnered from world development indicator (WDD). The data is examined using engle granger cointegration test and error correction model. The results found that the inflation has a significant adverse influence on economic growth of the country while foreign direct investment has a substantial optimistic impact in long run.