Sri Lanka Poverty Update : Background Report to Sri Lanka Poverty Assessment
Sri Lanka has made strong progress in reducing poverty and sharing prosperity among the less well-off in recent years. The poverty rate using the World Bank's 3.20 Dollars poverty line (in 2011 purchasing power parity) declined from 16.2 perce...
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| Format: | Report |
| Language: | English |
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World Bank, Washington, DC
2021
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| Online Access: | http://documents.worldbank.org/curated/undefined/703091634229318506/Sri-Lanka-Poverty-Update-Background-Report-to-Sri-Lanka-Poverty-Assessment http://hdl.handle.net/10986/36456 |
| Summary: | Sri Lanka has made strong progress in
reducing poverty and sharing prosperity among the less
well-off in recent years. The poverty rate using the World
Bank's 3.20 Dollars poverty line (in 2011 purchasing
power parity) declined from 16.2 percent in 2012/13 to 11
percent in 2016, a reduction that compares favorably to
regional peers. Extreme poverty is almost eliminated. Gains
were also made in nonmonetary measures of welfare, including
access to basic services, housing conditions, and asset
ownership. Growth was inclusive but less pro-poor: per
capita consumption growth of the bottom 40 percent of the
consumption distribution accelerated to an annualized 4.2
percent but was still below the population averageof 4.7
percent between 2012/13 and 2016. A significant increase in
labor income, particularly from nonfarm sectors, is the
major factor behind progress. The economy is steadily
transitioning toward industry and services, and sectors such
as construction and trade led job creation in recent years.
Wage growth has also been strong. The expansion in services
was underpinned by a booming tourism sector, as tourist
arrivals quadrupled between 2009 and 2016. Real gross
domestic product (GDP) growth was mainly driven by gains in
labor productivity, though most of the productivity growth
came from increases in within-sector productivity rather
than from reallocation effects. This implies that most of
the labor movement occurred from agriculture toward other
sectors with low productivity. Agriculture did not
contribute to poverty reduction as it had in the previous
decade because stagnating productivity and a reversal of
favorable prices slowed agricultural income growth. |
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