Sri Lanka’s current economic growth rate will not be sufficient to generate jobs for the nearly one million people expected to enter the workforce over the next decade, according to a leading World Bank economist.
In an exclusive interview with the Daily Mirror, World Bank Lead Economist for Maldives, Nepal and Sri Lanka, Arvind Nair, said that if growth continues at its present pace, the number of new jobs created will fall far short of what is required.
“We are looking at a serious jobs gap if growth remains slow. That is why private sector investment is critical to creating employment,” Nair said.
The World Bank has forecast economic growth of between three and four per cent for Sri Lanka this year. Nair also highlighted broader welfare concerns, noting that poverty levels have nearly doubled since the economic crisis. He stressed that sustained economic growth is essential not only for fiscal stability but also for job creation and improving living standards.
Country Economist for Sri Lanka, Shruti Lakhtakia, said that fiscal and external conditions have improved since the onset of the crisis, calling it a positive development. However, she emphasized that stability must be maintained as a foundation for stronger and more durable growth.
“For any meaningful growth, stability is the first step. We need to remain on the fiscal path and ensure continued exchange rate adjustments so the private sector has the confidence to invest,” Lakhtakia said.
She added that while the projected growth rate is sufficient to meet debt sustainability targets under the IMF programme—specifically achieving a debt-to-GDP ratio of 95 per cent by 2032—it falls short of meeting the broader aspirations of the Sri Lankan people.
Lakhtakia warned that achieving debt targets with growth of only around three per cent would require prolonged fiscal austerity, which is difficult to sustain. She also noted that higher growth is needed to give the government fiscal space to respond to unexpected shocks, such as the recent devastation caused by Cyclone Ditwah.
“Growth is essential—not just for fiscal stability, but for job creation and improving people’s living standards,” she said.
