Economic analyst Dhananath Fernando says the prevailing weather conditions could have a significant impact on Sri Lanka’s economy, as it affects agriculture and other key sectors.
Speaking on Ada Derana’s ‘BIG FOCUS’ programme today (25) about the impact of the prevailing El Niño conditions on the country’s economy, Fernando said that a drought could particularly affect hydropower generation.
He explained that if electricity has to be generated using thermal power due to reduced hydropower generation, Sri Lanka would have to import coal and diesel, which would directly put pressure on the Sri Lankan rupee.
Fernando noted that around 25% of the workforce in the Northern and Eastern provinces is engaged in agriculture, with the sector contributing around 8% directly to the economy. Therefore, any adverse impact on agriculture could have a significant economic impact.
He further said that food security could also be affected if sufficient rice harvests are not obtained, potentially requiring the country to import rice and other essential food items.
Accordingly, Fernando stressed that any adverse impact of the prevailing weather conditions on agriculture could affect economic growth and, in turn, have a wider impact on the country’s overall economic system.
