Attachments
OVERALL PROGRESS
Context
Sri Lanka ranks 78th out of 193 countries on the Human Development Index with a value of 0.782, classifying it as having ‘High Human Development.’ However, after briefly achieving upper-middle-income status in 2019, the country was reclassified as lower-middle-income in 2020, with a gross national income per capita of USD 3,720.
Sri Lanka is grappling with a multifaceted crisis marked by severe economic challenges, including high inflation, a depreciating currency, food insecurity, fuel shortages and disruptions to essential services. The situation is aggravated by the failed transition to organic farming, leading to a sharp decline in domestic agricultural production. After experiencing a period of economic growth averaging 6.2 per cent from 2010 to 2016, the economy slowed down, contracting by 3.6 per cent in 2020 due to the COVID-19 pandemic. The subsequent global economic downturn, coupled with rising commodity prices, a weakened tourism sector and a fiscal deficit, further devalued the Sri Lankan Rupee.
Although civil unrest peaked in 2022, occasional protests and strikes continued in 2023 over issues like increased electricity costs and rising taxes. Despite some improvements, inflation remains high and foreign debt and foreign exchange reserves are at historic lows. Long-term consequences include job insecurity, child malnutrition, gaps in public healthcare and a significant increase in migration, particularly that of skilled workers. Additionally, Sri Lanka faces recurring natural hazards, including cyclones, monsoon rains, flooding, landslides and a growing dengue epidemic. In May 2023, the country was affected by Cyclone Mocha, which brought heavy rainfall and wind. Dengue cases tripled compared to the previous two years, with the western, southwestern and eastern provinces being the most affected.