Unlike the Easter Sunday attacks, COVID-19 is not only affecting Sri Lanka. Its effect is felt by almost all countries across the world. The economic impact of this on Sri Lanka will not only be influenced by what is happening in the country, but also by how the disease is affecting global values chains, markets, and the movement of goods and people across the world. With the COVID-19 pandemic still unfolding, it is too early to estimate the economic impact of the crisis. This blog compares the economic impact of the Easter Sunday attacks to illustrate the likely impact of COVID-19 on Sri Lanka’s economy.
Over a quarter of the world’s population is currently under movement restrictions. For the first time in recent human history, coronavirus has shattered the myth that the economy must come first. While public health concerns, undoubtedly, should take precedence over all other considerations when dealing with the COVID-19 pandemic, it would be unwise to ignore the economic costs of the current situation. Small economies such as Sri Lanka, in particular, whose economic backbone is made up of micro, small, and medium sized enterprises (MSMEs), dependent on export revenue for foreign currency generation, and is simultaneously managing a critical debt and fiscal crisis, are going to be particularly vulnerable.