A World Bank publication noted that Sri Lanka and Bhutan were leading the South Asian region in testing of the COVID-19 virus.
They noted that both regions had the lowest rates per capita of the virus. The report noted that South Asian governments have maintained macro-economic stability through monetary easing and fiscal stimulus.
The World Bank report ‘Beat or Broken- Informality and COVID-19’ was released by the World Bank for publication on October 8.
The report noted ‘Bhutan and Sri Lanka avoided large-scale domestic transmission and experienced only very small numbers of infections per capita. Despite comparable measures, cases surged in Bangladesh and Pakistan.’
Sri Lanka and Nepal were the most effective in limiting mobility in the region to stop the spread of the virus. Afghanistan was the least capable of limiting the movement of its people.
PMI which is only gathered by India and Sri Lanka in the region had both dipped to ‘unprecedented levels’. Figures, however, have recovered in Sri Lanka while they still lie below 50 for India.
Sri Lanka’s early and decisive actions were commended by the report. It noted ‘Sri Lanka experienced the largest drop in mobility of all countries in April but recovered faster than the others thereafter, as a widespread domestic contagion was avoided.’Sri Lanka was also able to improve its trade figures as authorities had the foresight to implement tough import restrictions. Despite reduced receipts from tourism and remittances, Sri Lanka narrowed its current account deficit. The report predicts GDP to decline by 6.7 percent but for the current account deficit to remain low with lower outflows due to oil prices and import restrictions.
Sri Lanka was recently downgraded but the report notes ‘since the COVID crisis is global, investors may be less likely to discriminate across international markets.’
Disruption to education is cited as a major concern, especially for vulnerable groups. The report notes ‘Sri Lanka will need to strike a balance between supporting the economy amid COVID-19 and ensuring fiscal sustainability’.
