COVID-19 and its Economic Impact on Bangladesh and Sri Lanka

Dr Ganeshan Wignaraja, Professor Selim Raihan, Dr Amitendu Palit

15 May 2020

COVID-19’s economic impact on various countries of the South Asian region is slowly beginning to unfold. The pandemic has caused significant disruptions in regional supply chains. These are affecting exports from South Asia. The negative impact on exports is exacerbating from disruptions in major consumer markets in North America and Europe. The impact on exports – as well as the economic contraction experienced by several job-intensive industries, such as tourism, hospitality, civil aviation, retail, construction and housing – are going to adversely influence economic prospects of the South Asian countries. Apart from reduction in gross domestic product growth, livelihoods in the South Asian economies will be affected, as COVID-19-impacted sectors engage significant informal and seasonal workers who are experiencing lay-offs. The other adverse impact of COVID-19 on South Asia is from the bleak outlook for remittances. Inward remittances, particularly from the Gulf, are expected to drop sharply following the return of migrant workers.

 

As two of South Asia’s major economies with significant presence in global supply chains, Bangladesh and Sri Lanka are facing multiple challenges from COVID-19. These challenges, which will gradually evolve over the coming months, are compounded by economic exigencies of managing the heavy demand for expanding healthcare capacities to treat the infected. Such requirements, along with financial support schemes for the economically affected, create onerous challenges for national governments at a time when internal revenues and foreign exchange earnings are declining. This panel discussion will discuss the prospects and challenges for Bangladesh and Sri Lanka in the light of the existing conditions and the future prospects.