Connect with us

Business

WB: Lanka projected to grow by 3.3% amidst uncertainties

Published

on

Faris Hadad-Zervos, WB Country Director for Maldives, Nepal, and Sri Lanka

Sri Lanka’s economy is projected to grow by 3.3 percent in 2021, but the medium-term outlook is clouded by pre-existing macroeconomic weaknesses and the economic scarring from the COVID-19 pandemic, said the World Bank on Thursday (7).

A gradual recovery will likely lead to corresponding improvements in labour market conditions.

Most countries in South Asia are far from pre-pandemic trend levels, says the World Bank in its twice-yearly regional update.

The latest South Asia Economic Focus titled Shifting Gears: Digitization and Services-Led Development projects the region to grow by 7.1 percent in 2021 and 2022.

While the year-on-year growth remains strong in the region, albeit from a very low base in 2020, the recovery has been uneven across countries and sectors.

South Asia’s average annual growth is forecast to be 3.4 percent over 2020-23, which is 3 percentage points less than it was in the four years preceding the pandemic.

COVID-19 has left long-term scars on the region’s economy, the impacts of which can last well into the recovery. Many countries experienced lower investment flows, disruptions in supply chains, and setbacks to human capital accumulation, as well as substantial increases in debt levels.

The pandemic is estimated to have caused 48 to 59 million people to become or remain poor in 2021 in South Asia. Sri Lanka’s poverty at $3.20 per day poverty line is projected to fall to 10.9 percent in 2021, which is still significantly above the 2019 level of 9.2 percent.

“Sri Lanka has done well to vaccinate more than 50 percent of the total population so far and the Government is now focusing on targeted measures to prevent further COVID-19 waves, which could dampen the economic recovery,” said Faris Hadad-Zervos, Country Director of the World Bank for Maldives, Nepal, and Sri Lanka.

“The pandemic has brought unprecedented disruptions to education and the learning losses will be a drag on the country’s human capital gains. Targeted policies to reverse trends of long-term inequality and reduce gaps in equity are priority to realize growth prospects.”

In Sri Lanka, continued macroeconomic challenges, particularly the high debt burden, large refinancing needs, and weak external buffers will adversely affect growth and poverty reduction over the medium term.

Despite increased policy rates and price controls imposed by the government, inflationary pressure is expected to remain strong amid partial monetization of the fiscal deficit, currency depreciation, and rising global commodity prices. Food insecurity could worsen and poverty reduction slow if food prices remain elevated and shortages continue.

As countries build back, they have a chance to rethink their long-term development models. With the emergence of new digital technologies, South Asia has an opportunity to shift gears from a traditional manufacturing-led growth model and capitalize on the potential of its services sector.

In the medium to long term, digital technologies could become an important engine for job growth in Sri Lanka. However, despite widescale ownership of cellphones in Sri Lanka, the digital revolution will fall short of expectations without expansion of high-speed networks and accessible data on the whole island. Sri Lanka could provide new opportunities for economic mobility through policies that expand or universalize access to digital infrastructure, and investments in digital literacy are a prerequisite for widely shared benefits from these new opportunities.

“Countries in South Asia have a strong comparative advantage in exporting services, particularly business processes and tourism, whereas they have struggled to break into manufacturing export markets,” said Hans Timmer, World Bank Chief Economist for the South Asia Region. “To realize the potential of the services-led development, the region needs to rethink regulations and establish new institutions to support innovation and competitiveness.”



Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Advocata Institute highlights regulatory barrier limiting women’s overtime earnings

Published

on

Advocata Institute says that, a regulatory barrier prevents Sri Lankan women achieving pay parity with their male counterparts despite recent legislative amendments that have opened doors for women to work night shifts.

Despite the 2024 and 2026 liberalizations of the Shop and Office Employees Act (SOEA), which allowed women over 18 to work night shifts in IT, BPO, and hospitality sectors, women remain legally barred from maximizing their income due to rigid overtime restrictions.

Under current regulations, women cannot be employed under the Shop and Office Act for more than nine hours per day, a limit that strictly includes overtime. While Regulation 6 of the Act permits up to twelve hours of overtime per week, this daily “hard cap” creates a practical barrier that prevents women from accessing the full overtime entitlement available to male workers. This creates a regulatory paradox: while the law now permits women to work at night, it simultaneously restricts them from working the hours necessary to take home the same pay as a man performing the same role.

The urgency for reform is underscored by the Sri Lanka Labour Force Survey for the third quarter of 2025, which reveals a significant participation gap. Female labour force participation stands at 33.9 percent, compared to 68.6 percent for men. Closing this gap is a key structural reform priority under Sri Lanka’s International Monetary Fund Extended Fund Facility (EFF) programme, which highlights the importance of modernizing labour laws to expand labour supply and support long-term economic growth.

Debates on reforming these restrictions are often framed around the concern that removing gender-specific protections could expose women to exploitation. However, a woman’s vulnerability in the labour market is shaped less by the absence of gender-specific laws and more by structural challenges such as inadequate public transport, poor workplace infrastructure, weak enforcement of law and order, and limited access to childcare.

Addressing these underlying barriers is critical to ensuring both protection and opportunity. True empowerment requires shifting the focus from paternalistic hour-caps to creating a safe, gender-neutral environment that allows women the agency to maximize their earnings and contribute fully to the national economy.

Continue Reading

Business

Drifting lubricant barrels trigger oil spill on southern coast; 99% of clean-up completed

Published

on

Samantha Gunasekara

Authorities have traced the oil contamination reported along sections of the Hikkaduwa and Peraliya coastlines in the Galle District to drifting barrels of industrial lubricant, while rapid response teams have already removed almost all visible oil deposits from the affected beaches.

The Marine Environment Protection Authority (MEPA), together with the Sri Lanka Coast Guard, launched an immediate response after oil patches were detected along about a 20-metre stretch of coastline in the Hikkaduwa and Peraliya areas.

Addressing a media briefing at the Ministry of Environment, MEPA Chairman Samantha Gunasekara said emergency shoreline clean-up operations began on March 7 under the instructions of Environment Minister Dammika Patabendi.

“Nearly 99 percent of the oil patches have already been cleared from the affected coastal stretch,” Gunasekara said, adding that the swift intervention by authorities had prevented the incident from escalating into a wider marine pollution crisis.

Investigations carried out by MEPA have confirmed that the contamination originated from barrels containing Shell Corena S2 P 100 lubricant oil that had apparently been lost at sea and later drifted ashore.

The lubricant manufactured by Shell plc is commonly used to lubricate the internal components of reciprocating piston air compressors. Officials said the substance is not classified as a hazardous or toxic oil, easing initial fears of severe environmental damage.

MEPA General Manager Jagath Gunasekara said monitoring of the coastline was continuing to ensure that no additional oil patches washed ashore.

Meanwhile, the Department of Wildlife Conservation said there had been no confirmed reports of harm to marine animals, including sea turtles and coastal wildlife, following inspections in the affected areas.

Wildlife officials said they were continuing to keep the situation under close observation to ensure that marine fauna along the southern coast remained safe.

Authorities stressed that protecting the ecological integrity of the southern coastal belt—particularly around the Hikkaduwa marine area—remains a priority, while further investigations are under way to determine how the lubricant barrels ended up drifting in Sri Lankan waters.

By Ifham Nizam

Continue Reading

Business

Support for psychological well-being: Launch of telemedicine psychology program in response to Ditwa Cyclone

Published

on

The Sri Lanka College of Psychiatrists has launched an innovative telemedicine psychology program designed to provide essential support and mental health care to individuals adversely affected by the Ditwa Cyclone. This initiative is a vital response to the psychological challenges faced by the community in the aftermath of the disaster.

However, the implementation of this program has faced significant obstacles, primarily due to a considerable lack of access to smart devices among the target beneficiaries. Recognizing the urgency of this situation, S-lon Lanka (Pvt) Ltd has made a commendable contribution by donating tablet devices through its corporate social responsibility initiative, the “Suwasahana Charika” Program. This generous donation aims to bridge the technological gap, ensuring that individuals in need can access the psychological services offered by the telemedicine program.

The collaborative efforts were strengthened during a recent event that was attended by key figures, including Mr. S.C. Weerasekara, the Group Director / Chief Operating Officer of The Capital Maharaja Group, and Dr. Dashanthi Akmemana, the Chairman of the Sri Lanka College of Psychiatrists.

The Sri Lanka College of Psychiatrists expressed its gratitude to S-lon Lanka for its support and is committed to addressing the community’s mental health needs during this challenging time.

Continue Reading

Trending