March 25, Colombo (LNW): Sri Lanka’s official unemployment rate fell to 4.3 per cent in the final quarter of last year, down from 4.7 per cent in the preceding quarter, as the economy experienced growth during the last three months of the year, according to data released by the Census and Statistics Department.
The fourth-quarter growth rate, expanding at roughly three times the pace of the third quarter, marked a significant rebound for Sri Lanka’s Gross Domestic Product (GDP). GDP grew by 4.5 per cent in the final quarter of last year, compared to a modest 1.6 per cent growth in the third quarter.
This upturn followed a period of economic strain exacerbated by a foreign currency shortage reaching critical levels in early 2022.
With the country now generating $825 million monthly from both remittances and tourism, signs of recovery suggest that the worst of the economic crisis may be behind.
Individuals who had remained on the sidelines due to pandemic-induced economic disruptions and subsequent financial challenges over the past two years are beginning to find opportunities in the labour market.
Many companies, which had either downsized their workforce or halted hiring activities during the recent crises, are now resuming recruitment efforts as economic conditions improve.
However, over the past two years, Sri Lanka experienced significant emigration, particularly among professional categories, a trend not as pronounced before the economic crisis of 2022.
Consequently, companies restarting their hiring processes may encounter a talent shortage in the job market.
An official unemployment rate of 4.3 per cent indicates near full employment and suggests tight labor market conditions.
Additionally, the Labour Force Participation Rate (LFPR), representing the proportion of people employed or actively seeking work relative to the working-age population, declined further to 47.1 per cent by the end of the fourth quarter of last year, down from 48.8 per cent in the third quarter and 49.8 per cent in 2022.
Comparatively, in the Organisation for Economic Co-operation and Development (OECD), the Labour Force Participation Rate (LFPR) stands above 60 per cent.
