This report provides a general overview of the state of Sri Lanka’s economy with up to date figures and statistics for the year 2001. It is categorized into ten major sections and each section is explained in detail. The first three sections examine the policy perspectives, the economic performance and international environment that the country is a part of. The study also focuses on areas pertaining to competition policy and regulations and leading issues in the economic development process of the country. They examine themes on free float of the exchange rate, bilateral and regional agreements, governance issues, the crisis in the power sector and aid and aid under-utilization. The tenth and final section looks into the prospects related to the future of Sri Lanka’s economy.