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    Current Economic Situation of Sri Lanka

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    Pasinda Piyumal
    Sri Lanka is currently facing many economic difficulties that have been exacerbated by the COVID-19 pandemic. While the economy is projected to grow 3.3% in 2021, production remains below pre-pandemic levels. Poverty is expected to decline slightly but remain much higher than average. Long-term challenges include high debt, inadequate financial reserves, and inflationary pressures that will constrain growth and poverty reduction. The pandemic has severely impacted key sectors like tourism and transportation through decreased travel and shifts in consumer spending due to lower incomes and financial insecurity during the crisis.

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    Current Economic Situation of Sri Lanka

    Uploaded by

    Pasinda Piyumal
    26 views2 pages
    Sri Lanka is currently facing many economic difficulties that have been exacerbated by the COVID-19 pandemic. While the economy is projected to grow 3.3% in 2021, production remains below pre-pandemic levels. Poverty is expected to decline slightly but remain much higher than average. Long-term challenges include high debt, inadequate financial reserves, and inflationary pressures that will constrain growth and poverty reduction. The pandemic has severely impacted key sectors like tourism and transportation through decreased travel and shifts in consumer spending due to lower incomes and financial insecurity during the crisis.

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    Sri Lanka

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    Sri Lanka is currently facing many economic difficulties that have been exacerbated by the COVID-19 pandemic. While the economy is projected to grow 3.3% in 2021, production remains below pre-pandemic levels. Poverty is expected to decline slightly but remain much higher than average. Long-term challenges include high debt, inadequate financial reserves, and inflationary pressures that will constrain growth and poverty reduction. The pandemic has severely impacted key sectors like tourism and transportation through decreased travel and shifts in consumer spending due to lower incomes and financial insecurity during the crisis.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    26 views2 pages

    Current Economic Situation of Sri Lanka

    Uploaded by

    Pasinda Piyumal
    Sri Lanka is currently facing many economic difficulties that have been exacerbated by the COVID-19 pandemic. While the economy is projected to grow 3.3% in 2021, production remains below pre-pandemic levels. Poverty is expected to decline slightly but remain much higher than average. Long-term challenges include high debt, inadequate financial reserves, and inflationary pressures that will constrain growth and poverty reduction. The pandemic has severely impacted key sectors like tourism and transportation through decreased travel and shifts in consumer spending due to lower incomes and financial insecurity during the crisis.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Current economic situation of Sri Lanka

    Introduction

    This paper attempts to give the reader a short introduction about the economic situation of Sri
    Lanka. When it comes to economics, first we have to get an idea about economics.
    Economics is the subject which contains and holds the connection between the contents of
    production of goods and services, consumption of consumers, savings and investments, Job
    employment or unemployment of a person, national or personal income, quality of life, fiscal
    consolidation, monetary policy and inflation of goods, global economy etc.

    When accessing or addressing an economic problem or a crisis to find solutions for it, there
    the person who addresses it must have a better knowledge of the subject and what the society
    can do to overcome the situation and where the issue is.

    When it comes to Sri Lanka, the country is a low-middle-income country with a GDP of
    80.71 USD billions which has a growth of 4% (2021) and having the 113th place in world’s
    GDP ranking.

    The country is facing many difficulties and challenges in economics from many years ago
    and the COVID-19 pandemic situation has aggravated the situation of the country’s economy
    as much as possible. From now on, this paper will address the current economic situation of
    the country.

    The epidemic has cast a pall over an already bleak outlook. Despite the fact that the economy
    is predicted to increase by 3.3 percent in 2021 from a low base, production will remain 0.4
    percent lower than it was before COVID. A steady recovery will almost certainly result in
    improved labor market circumstances. Poverty is expected to reduce to 10.9 percent in 2021,
    which is still much higher than the current average of $3.20 per day. Over the long term,
    continued macroeconomic concerns, notably the high debt load, substantial gross financing
    requirements, and inadequate external buffers, will have a negative impact on growth and
    poverty reduction. Despite the government's raised policy rates and price controls,
    inflationary pressures are likely to remain high as the fiscal deficit is partially monetized, the
    currency depreciates, and global commodity prices rise. If food prices stay high and shortages
    persist, food insecurity may rise and poverty reduction may be slowed.
    In addition to the influence on productive economic activities, consumers often modified
    their purchasing behavior, largely owing to lower income and family finances, as well as the
    fear and panic that accompanied the pandemic. Service businesses such as tourism,
    hospitality, and transportation have incurred major losses owing to decline in travel.

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