COVID-19 Impact on Sri Lankan Economics

Abstract

COVID-19 is rapidly spreading across the world since 2019(2020 WHO) it has been a biggest challenge for mankind in the recent past years. The pandemic outbreak drastically effected China’s economy, the slowdown in China’s economy effected rest of the world as well. Sri Lanka is also not an exception for this. The first COVID-19 case was reported in Mar 11 in Sri Lanka after that many other positive COVID-19 cases were identified and government has taken pre caution methods to control the pandemic successfully for about six months but now the situation is out of our hand. COVID-19 pandemic created more negative effects in key income sectors like tourism, export earnings, small and medium entrepreneurship, tea, apparel and textile exports. Sri Lanka’s tea production for the period January - December 2019 totalled 300.1 million kgs and it was reduced to 278.5million kgs in January – December 2020 (Tea Exporters Association Sri Lanka). Apparel exports for the year 2019 was 481mn$ reduced to 382.28mn$ in 2020(Apparel exporters association) Also, Colombo stock exchange reported a historical low in mid-March, moreover Sri Lanka’s external sector performance weakened due to lack of exports this was due to the travel restrictions, Closure of ports and airports. Meanwhile the inflation of the country in 2019 reported 4.3% increased to 4.56% in 2020. However, some recommendations implemented by Central Bank of Sri Lanka (CBSL) to strengthen and rebuild the economic. Moratorium facilities granted for the loans, working capital loans with a low interest rate to support the small-scale retailers and small medium entrepreneurship. As of now Sri Lanka recovering from the pandemic impact and trying to recover the economic slowdown.