Sri Lanka Prosperity Index records marginal increase in 2019

• Western Province continues to lead other provinces as the most prosperous province.
• North Central province records highest increase in Provincial Prosperity Index.

Sri Lanka Prosperity Index (SLPI) marginally increased to 0.802 in 2019 from 0.811 in 2018 driven by improvements in ‘Well-being of the People’ sub-index, which h offset marginal declines in ‘Economy and Business Climate’ and ‘Socioeconomic Infrastructure’ sub-indices, the Central Bank (CB) said. 

In 2019, ‘Well-being of the People’ sub-index rose to 0.688 from 0.554 in 2018 mainly due improvements in the aspects of quality of education, health facilitation and wealth of people.

However, both ‘Economy and Business Climate’ and ‘Socioeconomic Infrastructure’ recorded marginal declines in the year with spillover effects of Easter Sunday attacks being a key reason.

‘Economy and Business Climate’ sub-index fell to 0.78 in 2019 from 0.891 in 2018 mainly due to adverse impacts stemmed from Easter Sunday attacks combined with adverse impacts of weather conditions towards the latter part of the year.

“Spillover effects of the Easter Sunday attack on tourism and related industries resulting in an increase in unemployment, and relatively high inflation due to adverse weather conditions towards the latter part of 2019 were the key reasons for the decline in Economy and Business Climate sub-index,” the CB noted.

Similarly, ‘Socioeconomic Infrastructure’ sub-index also declined to 0.934 in 2019 from 0.989 in 2018 with reduced usage of public transportation due to concerns on security in the aftermath of the Easter Sunday attacks being the key contributor to the decline.

In 2019, Western Province continued to lead the other provinces as the most prosperous province while Southern and Central provinces held onto second and third positions respectively.

With Prosperity levels in majority of provinces declining, North Central province was able to record the highest increase in Provincial Prosperity Index followed by Eastern and Western provinces. Uva province was ranked at the bottom of the Provincial Prosperity Index.

In 2019, North Central, Northern and Uva provinces recorded improvements in ‘Economy and Business Climate’sub-index due to increases in informal sector wages and increased formal sector employment.

Meanwhile, ‘Well-being of the People’ sub-index improved in all provinces except for Southern Province, predominantly due to improvements in the aspects of health, education and wealth of people where vehicle ownership and access to supermarkets increased.

The CB reasoned that the slight deterioration seen in Southern province was mainly due to reduced levels in the aspects of environment, entertainment and education.

However, Southern province along with the Western province became the only two provinces to record improvements in ‘Socio-Economic Infrastructure’sub-index, which was due to improvements to the road network, availability of electricity and enhanced crime-free environment.

Uva Province recorded the highest decline in the sub-index, falling to the last spot behind North Central province in 2019, mainly contributed by reduced levels of transportation and availability of safe drinking water.