COVID-19 and Its Impact on the Sri Lankan Economy

This report provides an introduction this COVID-19 and its impact of Sri Lanka Economy. This report is based on information about the COVID-19 epidemic from various sources. COVID-19 has spread over the world, prompting the World Health Organization to declare a worldwide emergency. In the context of Sri Lanka, the current study investigates the effects of COVID-19 on GDP, Employment, Inflation, Stock market performance, External sector performance and poverty. COVID-19 has a negative impact on both GDP and Employment in Sri Lanka, according to the analysis, despite the magnitude of the impact being substantially smaller than the South Asian average. Apart from that, ‘Panic buying’, disrupted local production and distribution, and import restrictions have all contributed to the economy’s inflationary pressures, with headline inflation leading the way.In addition to major macroeconomic effects, the study looked at COVID-19’s microeconomic effects by forecasting poverty. Due to reduced export earnings, external sector performance of Sri Lanka has weakened. Sri Lanka rupee has sharply depreciated against major currencies in the world. Finally, the COVID-19 welfare effect which is projected to be bigger than expected, will obstruct the country’s long-term economic progress. As a result, proper actions should be implemented to re-establish the economy while also controlling the pandemic’s spread.