No quick rebound in tourism expected: World Bank
View(s):Tourism has badly affected many economies including Sri Lanka and South Asia and even if border restrictions ease, a quick rebound is not expected, World Bank officials say.
“One can’t be optimistic about a quick revival in tourism because tourism is not only the result of closure of borders and lockdown measures but also hesitancy among tourists themselves to travel. Even if border restrictions ease we don’t expect a quick rebound in tourism especially mass tourism … in South Asia, Sri Lanka and the Maldives,” said Hans Timmer, World Bank Chief Economist for South Asia, responding to questions from the Business Times on Wednesday.
The event was a conference call briefing from Washington with a group of South Asian journalists on the occasion of grim news for the region from the bank; that the region will record its worst-ever recession owing to the COVID-19 pandemic.
According to the bank’s twice-a-year regional report, Sri Lanka’s economy will contract by 6.7 per cent (-6.7 per cent) in 2020.
Asked by the Business Times about vaccines, Hartwig Schafer, World Bank Vice President for South Asia, said that it’s not sure when they would be available. “There are many vaccines in development and would then require a seamless supply of an ultra-cold chain. We are working with governments to expand capacity to procure, to deliver and we are starting the work now to be ready when the vaccine is ready,” he said.
The bank said that Sri Lanka’s economy will recover next year to post 3.3 per cent growth and 2 per cent in 2022.
The report, the latest South Asia Economic Focus, forecasts a sharper than expected economic slump across the region, with regional growth expected to contract by 7.7 per cent in 2020, after topping 6 per cent annually in the past five years.
In previous recessions, falling investment and exports led the downturn. This time is different, as private consumption, traditionally the backbone of demand in South Asia and a core indicator of economic welfare, will decline by more than 10 per cent, further spiking poverty rates. A decline in remittances is also expected to accelerate loss of livelihoods for the poorest in some countries, the report said.
Three-quarters of all workers in South Asia depend on informal employment, especially in hospitality, retail trade, and transport—sectors most affected by containment measures. The report warns that informal workers and firms have little room to cope with unexpected shocks of the magnitude of COVID-19.