Analysing the Impact of COVID-19 on Sri Lanka Economy

Abstract

COVID-19 is the ongoing menace to the all over the world, labelled as pandemic and worst economic shock in recent history. Sri Lanka is one of the most vulnerable middle-income countries suffer most during this novel virus outbreak. The economic impact of COVID-19 can expect substantially both direct and indirect. Sri Lankan economy mainly depends on the foreign trade. This paper examines the impact of COVID-19 on the Sri Lankan economy and specific objectives are to assess the impact of COVID-19 using economic indicators, to find out the impact of COVID-19 outbreak on the tourism, agriculture and apparel and textile sector and to find out the solutions and recommendations to revitalize the Sri Lankan economy in future. This research study is based on the secondary data such as published research articles, Sri Lankan reports and newspaper articles. The outcomes uncovered that there is a tremendous effect due to COVID-19 on the Sri Lankan economy. Because, China is one of the major country linked with Sri Lanka in 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. And also there is many ongoing trades with USA, UK and European countries as well. It is also affected by COVID-19 pandemic due to decreased demand for exports. Demand for the tourism is dropped now. There is global travel restriction for foreign passengers from mid-March in Sri Lanka due to the closed of Sri Lanka’s border and travel restrictions between the districts. There is a considerable amount of Sri Lankan employers have been terminated in Middle East countries. It will affect the foreign income and Sri Lankan rupee is considerably depreciated against US dollar and reached. We can conclude that Sri Lanka is the most susceptible middle income country due to the impact of COVID-19 pandemic. Therefore, proactive policy measures should be undertaken to mitigate the economic slowdown in Sri Lanka.