Despite pandemic, Sri Lanka Prosperity Index shows marginal gain in 2020

Sri Lanka Prosperity Index (SLPI) marginally increased to 0.786 in 2020 compared to 0.783 recorded in 2019, its compiler, the Central Bank, said this week.

The ‘Well-being of the People’ sub-index improved amidst the COVID-19 pandemic, while decreases were observed in ‘Economy and Business Climate’ and ‘Socio-Economic Infrastructure’ sub-indices, during the year. 

SLPI is a composite indicator compiled by the Statistics Department of the Central Bank of Sri Lanka.

Improvements to healthcare facilities and more opportunities created for higher education indicated by an increase in the quota of students enrolled for the state universities, have contributed to the increase in Well-being of the People sub-index. 

In addition, enhanced quality of air and cleanliness of environment derived as side effects of declined industrial activities, reduced vehicle emission and limited mobility of people during the pandemic were also identified as key determinants for the increase recorded within the sub-index.

With the adverse effects of COVID-19 pandemic, the increase in unemployment in both formal and informal employment categories and decrease in gross domestic product caused by the subdued performance in economic activities were the key reasons for the decline in Economy and Business Climate sub-index in 2020.

Deceleration in transportation with the pandemic-driven lockdowns and travel restrictions imposed during the year, along with the significant reduction in the usage of public transportation due to health risks were the main factors for the decline in Socio-Economic Infrastructure sub-index.

Provincial Prosperity

The highest value of provincial prosperity index was scored by the Western province, while Southern and Central provinces were ranked at the second and third positions, respectively. Eastern province recorded the highest increase in provincial prosperity index compared to the previous year, followed by Southern, North Central, North Western, Uva, Western and Northern provinces. Concurrently, the highest decrease in provincial prosperity index was recorded in Sabaragamuwa province followed by Central province.

The highest improvement within the sub-index was recorded from the Eastern province, mainly with increases in employment and informal sector wages. In addition, Northern and Central provinces were also improved within the sub index, primarily due to increased informal sector wages and comparatively stable price levels. The deteriorations of the sub-index in other provinces were mainly caused by increased unemployment. In addition, the comparatively volatile and high price levels prevailed during the year have also contributed to the subdued performance in Uva, North Western and North Central provinces within the sub-index.

The sub-index improved in all provinces, predominantly due to enhanced facilitation for health, improved air quality and enhanced purity of environment; which was a result of the pandemic-driven precautions and actions, and increased opportunities for higher education with a significant increase in university intake during 2020. The highest improvement within the sub-index was reported from Northern province while Central province reported the lowest increase.

All provinces have recorded decreases in the sub-index and a significant reduction in the use of public transport facilities during the pandemic environment was the main reason for this. The highest decline of the sub-index was reported from Northern province and reduced availability of safe drinking water was also a key reason for this subdued performance. Meanwhile, the lowest decline within the sub-index was observed in North Western province.