The Asian Development Bank (ADB) said in its latest report that the election in January of a new president and the change in government, as well as the prospect of parliamentary elections later in the year, slowed economic activity as investors adopted a wait and see approach.
With political uncertainties now diminished, private sector investment is expected to revive, the ADB said.
"In 2015, there had been a shift in the priorities because we had promised a lot of relief going into the elections in January. We also had issues with some ongoing projects, so those projects were stalled for some time," Deputy Foreign Minister and leading economist Dr. Harsha De Silva told Xinhua.
"So that pace of construction-led development was shaken a bit until things were put back in order. So we did not see that high growth that we saw for the past couple of years in the construction sector. But other than that I think things went reasonably well as our overall growth has not seen a drastic fall as spoken about by some."
Sri Lanka has announced that it will resume all suspended foreign projects in the island nation early next year including a mega multi billion dollar Port City project in the capital funded by China, which will be pivotal in boosting Foreign Direct Investment's (FDI's) and strengthening the economy in the months to come.
With a more "sharper focus on engaging with the world, the government also aims to use Sri Lanka's strategic location in the Indian Ocean to attract investments.
"Our location is becoming strategically more and more important as the world becomes Asia focused in this coming century. Look at our position. We are going to be one of those countries that are going to be pivotal in the region," De Silva said.
"See the interest that we are attracting. So in that context our friends must appreciate our position. This is a God given gift."
Sri Lanka acts as the gateway to the huge South Asian market because of its excellent air connectivity linking countries around the world and its location on the east-west sea routes making it perfectly situated for marine logistics.
The country's tourism sector which suffered a severe blow due to decades of conflict has performed as the top runner in 2015, largely due to growing Chinese tourists. The government plans to unveil mega publicity campaigns in China next year to attract more Chinese travelers.
