Coronavirus to hit Sri Lanka's economy: warns Sri Lankan central bank

The novel coronavirus outbreak that is wreaking havoc and has claimed over 95,000 lives globally will affect Sri Lanka's economic growth, the central bank warned on Thursday, citing the impact on key sectors like tourism and exports.

The bank said exports and tourism sectors will be hit while remittances from Sri Lankan expatriates are also to slide.

"The exact impact on the Sri Lankan economy would depend on the extent of Covid-19 outbreak, its persistence and policy responses of major economies and trading partners," it said in a statement.

Commenting on the impact of the coronavirus-hit China, the central bank said in 2019 an 18 per cent of consumer goods imports and 33 per cent of investment goods imports were from China.

 

Tourism accounts for about five per cent of Sri Lanka's economy, with Britain, India and China the main markets. According to official figures released in April last year, tourist arrivals in the first quarter jumped 4.6 per cent to 740,600 from 2018.

The Chinese tourists comprised 9 per cent of arrivals in 2019, said the Central Bank of Sri Lanka.

"During first two months of 2020, there was a 55 per cent decline in Chinese tourist arrivals. During last month, the Chinese tourist arrivals had dropped by over 92 per cent," it said.

The bank added that the spread of the outbreak to countries such as South Korea and Italy could have a downward effect on remittance inflows.

"In 2019, three per cent of total foreign employment migration had been to South Korea and Italy," it said.

More than 3,200 have died and over 95,000 people have been infected globally from the virus, which by Thursday reached more than 80 countries and territories.

The virus that first originated in China in December last year has killed over 3,000 people and infected more than 80,400 in the country.