4 July 2022 01:19 am Views - 382
Sri Lanka’s unemployment rate softened in the March quarter as the economy emerged from most of the virus-related restrictions only to be brutally hit by the foreign exchange crisis which brought it to a near standstill, unwinding even the little improvements made in the employment matrices.
According to the Department of Census and Statistics, Sri Lanka’s official unemployment rate softened a bit to 4.3 percent by the end of March from 4.6 percent in December 2021.
But, the great economic collapse in March has had probably forced many thousands out of their jobs in the subsequent quarter, ended last week, while the damage is still unravelling at an intensified speed as factories are scaling down their operations rendering thousands of employees out of jobs, the Purchasing Managers Index data showed.
Meanwhile, the day income earners lost work as the crippling fuel shortage brought the entire transport system into near standstill, triggering a virtual lockdown in the entire economy since two weeks ago with no end in sight for the misery that the people undergo everyday.
The official unemployment rate masks the true unemployment in an economy as it doesn’t reflect those who are out of work but are not seeking employment in the survey period.
During the two years of the pandemic, while there was mass scale job losses caused by layoffs, another larger segment voluntarily left the employment market which is identified as, ‘the great resignation,’ as some feared catching the virus and others saw only less reasons for staying in their jobs.
As a result, the Mirror Business a fortnight ago showed that Sri Lanka had more people doing nothing by the end of 2021 than the ones engaged in some kind of employment, as reflected in the Labour Force Participation Rate (LFPR).
However, in the first three months, the LFPR edged up to 51.2 percent from 49.5 percent, the data released last week showed.
LFPR measures the economically active population or the segment of the population who are either engaged in employment or at least looking for work as a share of the country’s working age population.
Although there was a slight improvement in the rate in the March quarter, this could sink to new lows in the subsequent quarters as the Sri Lankan economy is undergoing its worst economic downturn which will erase economic opportunities at a rapid pace.
The World Bank recently projected 7 percent contraction in the Sri Lankan economy in 2022 with the decline continuing through 2023 before any improvement could see from 2024, which is also going to be insignificant.