COVID-19 Outbreak, Impact on Sri Lankan Economy

Abstract

We all have been affected by the current COVID-19 pandemic. COVID-19 is the ongoing menace to the all over the World, labeled as pandemic and worst economic shock in recent history. The Corona virus pandemic is the defining global health crisis of our time. The pandemic is moving like a wave. But COVID-19 is much more than a health crisis, by stressing every one of countries it touches, it has the potential to create devastating social, economic and political crisis that will leave deep scars. COVID-19 initial impact on Chinas economy and Chinas consequent slowdown may have adverse economic impact on the rest of the world as well. Sri Lankan economy mainly depends on the foreign trade. China is the one of the major country linked with Sri Lankan tourism, investment and many agreements. It is the second largest source market for Sri Lanka in terms of tourism and imports and the main supplier of raw materials for textiles also. Therefore COVID-19 in China has been caused a significant impact on Sri Lankan economy. This article examines the impact of COVID-19 on the Sri Lankan economy, tourism, Apparel and Textiles, Poverty and Financial Market. Apparels, Sri Lanka major merchandise export, faced disruptions with earnings from textiles and garments falling by 27.6% in 2020. The tourism industry has collapsed, business are finding it more difficult to operate due to the impacts of the curfew. Demand for the tourism is dropped now. There is a real risk that COVID-19 will set back the Sri Lankan economy and cause higher unemployment, poverty and deprivation. There is considerable amount of Sri Lankan employers have been terminated in Middle East countries. The events and activities related to production and employment of most of small and medium enterprises are significantly hit by the COVID-19 pandemic. The outbreak of COVID-19 and the impact on the wider economy has placed unprecedented pressure on Sri Lanka business. Therefore, proactive policy measures should be undertaken to mitigate the economic slowdown in Sri Lanka.