Sri Lanka’s real GDP is expected to fall by 9.2 percent this year and a further 4.2 percent in 2023.
The World Bank, in its latest South Asia Economic Focus, said Sri Lanka’s debt woes and depleting foreign reserves were exacerbated by the region’s economic distress and took a heavier toll.
In a press statement it issued to coincide with the release of the report, the Bank said that some countries are coping better than other. ‘Exports and the services sector in India, the region’s largest economy, have recovered more strongly than the world average while its ample foreign reserves served as a buffer to external shocks. The return of tourism is helping to drive growth in Maldives, and to a lesser extent in Nepal—both of which have dynamic service sectors’.
South Asia’s migrant workers, one of the areas the World Bank reviewed, were disproportionately affected when restrictions to movement were imposed during COVID-19. But the World Bank found that the later phase of the pandemic highlighted the crucial role migration can play in facilitating recovery.
Survey data from the report suggests that in late 2021 and early 2022, migration flows are associated with movement from areas hit hard by the pandemic to those that were not, thus helping equilibrate demand and supply of labour in the aftermath of the COVID-19 shock.
The report makes two recommendations to remove restrictions to labour mobility which is vital to the region’s resilience and its long-term development.
It recommends that cutting the costs migrants face should be high on the policy agenda and policy makers should de-risk migration through several means including more flexible visa policies, mechanisms to support migrant workers during shocks, and social protection programs.
To read the press release and full report click on :SAEF_Fall2022_FullReport_Embagroed_Final