Sri Lanka has been identified as one of the most severely affected countries in the Asia-Pacific region due to the ripple effects of the ongoing West Asia crisis, according to a United Nations report.
The report, published by the United Nations Development Programme (UNDP), provides a preliminary assessment of how the conflict is disrupting global trade, energy markets, and financial systems.
Titled “Military Escalation in the Middle East: Human Development Impacts Across Asia and the Pacific,” the report highlights that Sri Lanka is highly exposed to the crisis, as 80.2 percent of migrant-worker departures in 2025 were directed to Middle Eastern countries.
It also notes a sharp decline in tourism, with average daily arrivals falling from around 9,976 in February to 5,956 between March 1 and 8, 2026—a drop of nearly 40 percent.
The report warns that Sri Lanka, along with other South Asian nations such as Bangladesh, India, and Pakistan, could face economic strain due to weakened export links with the Gulf region, which may reduce agricultural incomes, restrict access to essential imports, and disrupt production activities.
Estimated losses in tea exports alone are projected at between US$10 million and US$15 million per week.
Across the Asia-Pacific region, overall trade output losses are expected to range from US$97 billion to US$299 billion, representing approximately 0.3 to 0.8 percent of regional GDP.
The UNDP further cautioned that around 8.8 million people across 14 countries included in the assessment could fall into poverty as a result of the ongoing economic shocks.
