According to the World Bank’s Sri Lanka Development Update, Sri Lanka is experiencing an extreme economic crisis as a result of job and earnings losses, significant food inflation, and the country’s depleting funds (SLDU).
The government has stoked inflation by creating money to pay off domestic loans and international liabilities.
According to the World Bank, the number of individuals living in poverty has likely increased by 11.7 per cent, or over half a million people, since the coronavirus pandemic began.
According to the World Bank update, “The impact was disproportionately large among those working in more urbanised areas such as the Western province, likely due to the large impact on industry and places that had a high number of poor before the pandemic, such as the Northern, Eastern, Uva, and Sabaragamuwa provinces.”
According to the World Bank, largely rural districts such as Kandy and Ratnapura account for a major share of the new poor following the COVID-19 pandemic.
The workforce’s susceptibility was high due to high informality and insufficient safety nets, restricting their ability to cope with economic shocks.
Since the beginning of the pandemic, the World Bank estimates that 500,000 individuals have slipped into poverty, equating to five years of progress in poverty reduction.
(With inputs from agencies)