Home » 3.18 million Middle class Sri Lankans fall into poverty this year: WB director

3.18 million Middle class Sri Lankans fall into poverty this year: WB director

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By: Staff Writer Colombo (LNW): At Least 3.18 million middle class persons in Sri Lanka will fall into poverty level with the rising cost of living and loss of income in the economic crisis, this has doubled the national poverty level to 25 per cent. This was disclosed by World Bank Country Director for Maldives, Nepal and Sri Lanka Faris Hadad-Zervos when he addressed meeting in Colombo recently. Sri Lanka has lost half a million jobs in industry and services. With the rising cost of living, this has doubled the national poverty level to 25 per cent in 2022 from 13.1 percent of the population in 2021, One of the consequences has been the growth in regional disparities. While poverty jumped to 15 per cent in urban areas, it skyrocketed to 52 per cent in rural areas. Several factors in the past five years explain this development, most notably a restrictive trade regime, a poor investment climate, and a careless monetary policy, not to mention the COVID-19 pandemic. According to World Bank statistics 13.1 percent of the 22.15 million population of Sri Lanka is 2.9 million which was the number of poor persons in the country at that time. According to World Bank country Director this number has increased to 25 percent in 2022. That was 25 percent of the population of 22.18 million at the end of 2022 and it was amounting to 5.54 million. Accordingly 2.64 million middle class persons have been added to the country’s poverty level. World Bank country director predicted that the number of poor people in the country will increase up to 27.4 percent of the population in 2023. According to mathematical model predictions it will be 27.4 percent of the population of 22.20 million numbering 6.08 million. The number of persons in the poverty level will increase to 3.18 million by th end of 2023 from 2,90 million in 2021, mathematical model predictions showed. “The crisis that has had a devastating impact on people’s standards of living, is exacting a heavy toll on the poor and vulnerable and is jeopardizing Sri Lanka’s past development gains, Faris Hadad- Zervos claimed. He added: ‘Many more people are just one shock away from poverty. The World Bank estimates that 5.7 percent of the population lives less than 10 percent above the poverty line and a further 5.6 percent between 10 and 20 percent above the poverty line. ‘This dramatic increase in poverty and vulnerability has wiped out decades-long human capital gains and deep reforms are essential to stabilize the economy and bold action to protect the poor and vulnerable. The government has now committed to an ambitious reform agenda and implemented some difficult and necessary reforms, including tax reforms, cost reflective utility pricing, a strong social safety net and debt restructuring to stabilize the economy.
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