Sri Lanka’s unemployment rate narrowed to 389,062 persons or 4.3 percent during the fourth quarter of 2015 (4Q15) from 4.4 percent a year ago but the fall in unemployment is sharp from the September quarter where the rate was 5.0 percent, the data released by the Census and Statistics Department showed. As a result, Sri Lanka’s total employed population increased to 8,558 million by end-December 2015, up from 8,395 million a year ago, indicating a new 162,669 jobs created during the 12 months.
The labour force participation rate increased to 53.6 percent from 52.9 percent a year ago. Unemployment below 4.0 percent is generally considered as near-full employment but in Sri Lanka there is a severe dearth in several categories of labour.
The proponents of the controversial Indo-Sri Lanka Economic and Technology Cooperative Agreement (ETCA) argues for the importation of labour in areas where critical labour cannot be found in the domestic market but opponents fear the opening up of floodgates for cheaper Indian employees, which could cost the Lankans their jobs. In another positive trend in the labour market, during the 12 months to December 2015, Sri Lanka’s labour has slowly migrated into industries and largely to the services sector from the low-productivity agriculture sector