Sri Lanka prosperity dips in 2019

ECONOMYNEXT – Sri Lanka’s prosperity index which tracks parameters going beyond output including employment, wages and infrastructure had seen a fall in 2019, the central bank which compiles the gauge said.

The index had fallen to 0.802 in 2019 from 0.811 in 2018 mainly due to a fall in the economy and business climate index, while wellbeing of the people, which tracks education and health showed gains.

“Spillover effects of the Easter Sunday attack on tourism and related industries resulting in an increase in unemployment, and relatively high inflation due to adverse weather conditions towards the latter part of 2019 were the key reasons for the decline in Economy and Business Climate sub-index,” the Central Bank said.

“Reduced usage of public transportation due to concerns on security, aftermath of the Easter Sunday attack, mainly resulted in the decline in Socio- Economic Infrastructure sub-index.”

Western province had the highest value. North Central province recorded the highest increase in provincial prosperity index followed by Eastern and Western provinces.

The Index for 2020 is not out yet.

The full statement is reproduced below.

National Prosperity

Sri Lanka Prosperity Index1 (SLPI), recorded 0.802 in 2019 compared to 0.811 in 2018, with marginal declines of ‘Economy and Business Climate’ and ‘Socio- Economic Infrastructure’ sub-indices. Meanwhile, the ‘Well-being of the People’ sub-index has improved during the year.

Spillover effects of the Easter Sunday attack on tourism and related industries resulting in an increase in unemployment, and relatively high inflation due to adverse weather conditions towards the latter part of 2019 were the key reasons for the decline in Economy and Business Climate sub-index.

Reduced usage of public transportation due to concerns on security, aftermath of the Easter Sunday attack, mainly resulted in the decline in Socio- Economic Infrastructure sub-index.

Western province led with the highest value of provincial prosperity index, while Southern and Central provinces were ranked at second and third positions, respectively. In comparison to the previous year, North Central province recorded the highest increase in provincial prosperity index followed by Eastern and Western provinces.

Economy and Business Climate Sub-Index

Eastern, North Central, Northern and Uva provinces have recorded improvements in the sub-index with increases in informal sector wages and increased formal sector employment. The deterioration of the sub-index in other provinces was mainly caused by decreases in employment and high inflation levels.

Well-being of the People Sub-Index

The sub-index improved in all provinces except for Southern, predominantly due to improvements in the aspects of health, education and wealth of people where vehicle ownership and access to supermarkets increased. Meanwhile, the slight deterioration of the sub-index in Southern province was mainly due to reduced levels in the aspects of environment, entertainment and education.

Socio-Economic Infrastructure Sub-Index

Southern and Western provinces recorded increases in the sub-index with improvements to the road network, availability of electricity and enhanced crime-free environment. The decline of the sub-index of other provinces, with the highest decline recording from Uva, was mainly due to reduced levels of transportation and availability of safe drinking water.