The World Bank says tourism activity in Sri Lanka was on a path to recovery and has been severely damaged by the coronavirus pandemic.

The June 2020 edition of the World Bank Global Economic Prospects report suggests that COVID-19 resulted in a sharp decline in tourist arrivals in economies like Sri Lanka, Bhutan, Nepal and the Maldives, where tourism directly and indirectly accounts for more than two-thirds of GDP.

The report said a sharp decline in tourism is expected in Sri Lanka.

The World Bank said “in Sri Lanka, the combination of falling tourism, manufacturing activity and services associated with the pandemic is envisaged to cause output to contract by 3.2 percent, despite the earlier recovery from the April 2019 terrorist attacks”.

The World Bank report stated that in the South Asian Region several Central Banks, including those in Sri Lanka, India, Pakistan and Bangladesh, have lowered policy interest rates, aided by an impending drop in inflation due to falling oil prices.

The World Bank noted that monetary policy actions have been complemented with measures to provide liquidity to financial markets and banking systems in several economies with Sri Lanka providing loan repayment holidays and lowering liquidity coverage ratios.

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