- But jobs are expected to fall sharply in the next quarter as opportunities shrink in a shrinking economy.
Sri Lanka’s unemployment rate softened in the March quarter as the economy emerged from most of the virus-related restrictions, only to be hit hard by the foreign exchange crisis that almost paralyzed it, disrupting even the slightest improvement in the employment matrix.
According to the Department of Census and Statistics, Sri Lanka’s official unemployment rate softened to 4.3 percent at the end of March from 4.6 percent in December 2021.
But, the big economic downturn in March probably forced thousands of people out of their jobs in the next quarter that ended last week, while losses are still unfolding at a rapid pace as factories cut back on their activities, leaving thousands of workers out. At work, the Purchasing Manager showed index information.
Meanwhile, the day income earners lost their jobs because a shortage of crippled fuel brought the entire transportation system to a near stagnation, a virtual lockdown in the entire economy began two weeks ago, where there is no end to the misery that people go through every day.
The official unemployment rate masks true unemployment in an economy because it does not reflect those who are out of work but not looking for a job during the survey period.
In the two years of the epidemic, when massive job losses were caused by layoffs, another large portion voluntarily left the job market marked, ‘Great Resignation’, because some feared being infected with the virus and others saw only fewer reasons. To stay in their jobs.
As a result, Mirror Business a fortnight ago showed that by the end of 2021, there were more people in Sri Lanka who did nothing more than those employed in any form of employment, as reflected in the Labor Force Participation Rate (LFPR).
However, in the first three months, LFPR has risen from 49.5 per cent to 51.2 per cent, data released last week shows.
LFPR measures economically active populations or segments of the population who are either employed or at least looking for work as a part of the country’s working age population.
Although the rate improved slightly in the March quarter, it could fall to new lows in the next quarter as Sri Lanka’s economy goes through its worst recession, which will rapidly erode economic opportunities.
The World Bank recently projected a 7 percent contraction in the Sri Lankan economy in 2022 and this decline will continue until 2023 before any improvement is seen from 2024, which is going to be negligible.