Sri Lanka’s GDP is projected to decline by 6.7% this year, with the COVID- 19 crisis affecting all key drivers of demand: exports private consumption, and investment, the World Bank said in its  latest report  titled ‘South Asia Economic Focus’

“The COVID-19 crisis has substantially clouded the outlook and exacerbated an already challenging macroeconomic situation. The economy is expected to contract by 6.7% in 2020, with all key drivers of demand affected: exports, private consumption and investment,” the report stated.

Meanwhile, the World Bank forecasts Sri Lanka’s fiscal deficit to widen sharply to 11.1% this year, from 6.8% in 2019, the debt-to-GDP ratio to exceed 100% from 86.8% in 2019.

The World Bank also expects Sri Lanka’s debt-to-GDP levels to remain elevated over 100% levels in 2021 and 2022 also.

Meanwhile, for South Asia, the regional economy is projected to contract by 7.7% this year, by far the largest decline on record.

“Even with the baseline forecast of a rebound next year, South Asia’s per-capita GDP in 2021 would still be 6% below its level in 2019,” the World Bank stated.

Further, the World Bank noted that forecast of the region’s GDP in 2021 is now 15% below what they forecast in the Fall of 2019 before the spread of COVID-19 and this change in the forecast illustrates higher global contagion than expected earlier and the devastating economic impact of the pandemic.