Connect with us

Reports

Sri Lanka’s Growth to Recover Gradually But Commitment to Reforms Remains Essential

Published

on

Sri Lanka’s economic growth is projected to pick up to 3.6% in 2019 and further to 3.8% in 2020 from 3.2% in 2018, a new Asian Development Bank (ADB) report says.

ADB’s flagship annual economic publication, Asian Development Outlook (ADO) 2019, forecasts a gradual recovery supported by a turnaround in the construction sector and continued growth in services. The agriculture sector, which picked up pace in 2018 after two years of weak performance, is expected to continue growing at the same pace assuming weather conditions remain normal.

“While the economy is projected to recover over the next two years, for Sri Lanka to sustain and accelerate growth, fiscal and structural reforms remain essential,” said the Senior Country Economist at ADB’s Sri Lanka Resident Mission Mr. Utsav Kumar. “Addressing policy constraints will be critical to avoiding repeated macroeconomic pressures and to generating sustained sources of foreign exchange earnings.”

Proposals announced in the 2019 budget will support private expenditure and thus growth. The public investment to gross domestic product (GDP) ratio is expected to pick up and will be an impetus to investment and the construction sector. Overall, the budget aims to keep the primary balance in surplus in 2019 and 2020 and reduce the fiscal deficit further, thereby maintaining the path of fiscal consolidation.

Headline inflation, as measured by the national consumer price index, is expected to inch up to 3.5% in 2019 and further to 4.0% in 2020 stemming from a pickup in economic activity, base effect for inflation, and a strengthening in nonfood and core inflation observed since late 2018 and early 2019.

The current account deficit will drop to 2.5% of GDP in 2019 and increase marginally in 2020. A recovery in agriculture exports, continued increase in tourist earnings, and a slowdown in vehicle imports will contribute to a decline in current account deficit. Though the impact of Brexit on the overall Sri Lankan economy is estimated to be marginal, a downside risk to the garment sector emanates from a no-deal Brexit scenario involving a possible tariff escalation between Sri Lanka and the United Kingdom. The large repayments on account of external debt servicing and political uncertainties may affect market sentiment and exert pressure on the Sri Lankan rupee.

A key policy challenge for the Sri Lankan economy is recurrent weather-related disasters in 2016 and 2017 that have had multiple impacts as evidenced by slow economic growth, high domestic food prices, a high oil import bill, high government spending, and high number of food-insecure households limiting daily minimum calorie intake. With a large proportion of the population close to the poverty line, gains made in poverty reduction over the past two decades may be at risk from exposure to disasters. Sri Lanka needs to focus on areas prone to disasters and to move toward a more disaster-resilient economy by preventing and mitigating consequences of weather-related hazards. Efforts also need to be made toward mobilizing funds for risk reduction and adaptation, establishing the right policy framework, and building institutional capacity.

Continue Reading
Comments

Reports

How the Pandemic Stress-Tested the Increasingly Crowded Digital Home

Published

on

The average U.S. household now has a total of 25 connected devices, across 14 different categories (up from 11 in 2019), including laptops, tablets and smartphones; video streaming devices and smart TVs; wireless headphones and earbuds; gaming consoles and smart home devices; and fitness trackers and connected exercise machines.

Thirty-one percent of Americans admit to feeling overwhelmed by the number of devices and subscriptions they need to manage.

Sixty-six percent of households have smart home devices; 39% of those smart home device owners paid for increased home internet speed.

More than 50% of U.S. adults had virtual doctor visits, and 82% of those who used virtual doctor visits claimed to be satisfied with the experience.

Fifty-eight percent of U.S. households have a smartwatch or fitness tracker, and 39% of consumers own one personally. Among device owners, 14% bought their smartwatch or fitness tracker since the start of the pandemic.

Seven-in-10 consumers who began smartphone-based retail behaviors, such as mobile ordering, during the pandemic intend to continue those behaviors.

Among respondents planning to switch mobile providers in the next year, the top reason is to access 5G service.

Why this matters
In March 2020, households became the center of daily American life — and connectivity took on newfound importance. With work, school, medical visits, fitness and retail shopping all crowding under one roof, rapidly shifting needs drove sudden demand for an evolving suite of connected devices and digital services. The second edition of “Deloitte’s Connectivity & Mobile Trends 2021 Survey,” an online survey of 2,009 U.S. consumers conducted in March 2021, saw households beginning to push the limits of connectivity. More consumers upgraded their home broadband, added Wi-Fi extenders, and expanded their mobile data plans. While connectivity providers and device makers quickly rallied to keep the nation connected and productive, many consumers were overwhelmed with managing a wide range of devices, services and communications suddenly necessary for life at home.

Homework takes on new meaning
Networks, services, devices and institutions rallied to effectively support the shift to working and schooling from home. Some had connectivity and technology issues but for many, human factors posed more of a challenge.

  • At the start of 2021, 55% of U.S. households included someone working from home and 43% had someone schooling from home. Top benefits of at-home behaviors were the ability to reduce the chances of getting COVID-19, closely followed by having no commute and being more comfortable.
  • Twenty-eight percent of home workers and 32% of home schoolers reported that they struggled to connect to the internet from certain locations in their home.
  • Workers at home cited the inability to meet face-to-face with colleagues or clients as a top challenge, followed by working longer hours than they would in-person, and being distracted by non-work activities. For home schoolers, the top challenge was getting distracted by non-school online activities, followed by not being able to meet face-to-face with teachers and classmates, and doing more schoolwork than if in-person.

Virtualized health care: a successful beta test
Recent growth in inexpensive and easy videoconferencing helped medical organizations overcome distance challenges to deliver much needed virtual house calls during the pandemic. The pandemic’s urgency also suspended some of the regulatory barriers that made it difficult for providers to connect virtually with patients. This was good news for consumers who felt virtual doctor visits helped them continue to receive care during the pandemic, while minimizing risk of exposure to themselves and to other patients.

  • More than 50% of U.S. respondents had virtual doctor visits, and 29% of adult respondents assisted someone else in their household with a virtual visit.
  • Eighty-two percent of those respondents using virtual doctor visits claimed to be satisfied with the experience.
  • Among the benefits of attending virtual medical visits, 44% cited ease in attending appointments, 43% said it reduced their chances of getting COVID-19, 20% said it was easier to schedule appointments, and 10% cited ease in sharing medical data with doctors.
  • Sixty-two percent said they are likely to schedule future virtual appointments after the pandemic ends.
  • However, patients missed the human touch and face-to-face interactions (28%) and were frustrated with medical staff’s inability to directly measure vital statistics (21% overall but higher among older patients).

Does this mean healthier innovation?
Success with virtual doctor visits may bode well for future health care innovation. As wearables advance to record more discrete health, fitness and wellness data, their ability to support health care providers will likely grow, along with many users’ desire to share more of this data with their providers.

  • Overall, 58% of households have a smartwatch or fitness tracker, and 39% of consumers own one personally. Among device owners, 14% bought their smartwatch or fitness tracker since the start of the pandemic.
  • The largest use reported is for health and fitness (55%), primarily to measure walking steps and athletic performance, track heart health, and monitor sleep and calories.
  • Among those interested in wearables, 39% listed cost as the primary reason they haven’t bought one — considerably larger than other factors. Yet, more seem to see the value of wearables, especially for health and fitness — 27% of those who don’t have a smartwatch or fitness tracker in their household are interested in buying one, up from 24% before COVID-19.
  • Sixty percent of users claim to not be particularly concerned about the privacy of their wearable-generated data.

Smartphones led to smart behaviors
Both in and out of the home, smartphones helped people get on with their lives while mitigating pandemic risks. Users adopted a range of new digital behaviors, including online mobile payment services, contactless store payments and shopping and buying online from local providers who offer home delivery or curbside pickup. These mobile solutions were available prior to COVID-19, but the pandemic further highlighted their value.

  • Using a mobile app or website to order food from a local provider grew from 36% to 56% during COVID-19.
  • Using a mobile app or website to order a product and then pick it up at a local store grew from 31% to 51%.
  • Contactless payments jumped from 28% to 46% during the pandemic; using mobile payments to shop on social media grew 28% to 42%.
  • Among those who began smartphone-based retail behaviors during the pandemic, around 70% intend to continue most of those behaviors.

A true test of connectivity
The survey also revealed that while connectivity held up remarkably well to the demands of unexpectedly crowded homes during the pandemic, many households had reached the limits of broadband, wireless and Wi-Fi networks. And with reduced movement outside the home during the pandemic, it’s not yet clear how well existing smartphones and mobile connectivity will serve post-pandemic behaviors.

Since the pandemic began, 19% of those with home internet had upgraded to a higher-speed home internet service and 8% switched providers.

Those who switched most often cited cost, followed closely by reliability, inadequate coverage throughout the home, and slow connectivity.

Around 70% of consumers said their home Wi-Fi met their needs for range and speed, but more have tried to fix dropouts and dead spots by extending their home networks. During the pandemic, 30% of home internet users purchased Wi-Fi extenders, 19% bought mobile hotspots, and 14% added mesh Wi-Fi networks.

Close to 40% of households with mobile data plans made some change to their mobile data plan since the start of the COVID-19 pandemic. Upgrading to a new phone was the highest driver for this, followed by switching to an unlimited data plan and adding 5G.

Sixty-six percent of respondents noted they have had their smartphone for at least a year, while 31% noted they plan on upgrading within a year.

Among respondents planning to switch mobile providers in the next year, the largest reason is to get 5G service, followed closely by getting better value for the price.

Among those who do not yet have 5G mobile coverage, 54% say they intend to eventually buy a 5G-compatible smartphone and 52% will sign up for a 5G mobile data plan with their carrier, when 5G becomes available.

Continue Reading

Reports

Zimbabwe’s Economy is Set for Recovery, but Key Risks Remain

Published

on

Gross Domestic Product (GDP) growth in Zimbabwe is projected to reach 3.9 percent in 2021, a significant improvement after a two-year recession, according to the World Bank Zimbabwe Economic Update (ZEU) launched today.

Economic growth this year will be led by recovery of agriculture as rains normalize, businesses adjust to limitations caused by the COVID-19 (coronavirus) pandemic, and inflation slows down. However, disruptions caused by the pandemic will continue to weigh on economic activity in Zimbabwe, limiting employment growth and improvements in living standards.

The ZEU, Overcoming Economic challenges, Natural Disasters, and the Pandemic: Social and Economic Impacts, provides the World Bank perspective on macroeconomic and poverty developments and discusses ways to strengthen public service delivery in key sectors. This is the third economic update for Zimbabwe produced by the World Bank.  Economic Updates are a standard World Bank tool for macroeconomic and fiscal monitoring.

The ZEU notes that economic recovery is expected to strengthen further in 2022 with GDP growing at 5.1 percent as the deployment of vaccines intensifies and implementation of National Development Strategy 1 (2021-2025) bears fruits. Overall, the COVID-19 global contagion continues to pose significant downside risks, and thus the global and local outlook remains uncertain. A prolonged pandemic, weaker global demand, and heightened macroeconomic instability could choke economic growth, increase poverty, and worsen human capital development outcomes.

Mitigating these risks requires domestic policies to strengthen and sustain macroeconomic stability – which is critical for consolidating economic recovery. Recent efforts to stabilize prices through rule-based monetary and exchange rate policies have been effective and must be continued and expanded. Fiscal policies supportive of these efforts have thus focused on avoiding monetary financing and quasi-fiscal activities, reducing distortive subsidies, and improving fiscal and debt transparency.

“Improving the country’s growth prospects will require further attention to policies that strengthen the quality of service delivery in the social sectors. Preserving lives during an unprecedented that protects livelihoods, strengthens social protection, improves food security, and ensures better education outcomes,” said Mukami Kariuki, World Bank Country Manager.  

Facing tight public finances and limited recourse to external financing, Zimbabwe will need to rely mostly on reallocating domestic resources to optimal public uses and leveraging private financing and humanitarian support where possible. Addressing underlying challenges in health, education, social protection, and food security will require sustained financing, strengthened accountability frameworks and investments in appropriate management information systems.

The ZEU reviews developments in 2019 and 2020; and emerging trends in 2021. Part One of the ZEU provides an overview of the macroeconomic and poverty context. Part Two assesses the impact of COVID-19 and other exogenous shocks on delivery of basic services to the poor and proposes mitigating actions for discussion. It also summarizes key policy options needed to stabilize Zimbabwe’s economy, minimize the social costs of the transition, and prepare for an economic recovery.

Continue Reading

Reports

Slow jobs recovery and increased inequality risk long-term COVID-19 scarring

Published

on

people art

The labour market crisis created by the COVID-19 pandemic is far from over, and employment growth will be insufficient to make up for the losses suffered until at least 2023, according to a new assessment by the International Labour Organization (ILO).

The ILO’s World Employment and Social Outlook: Trends 2021  (WESO Trends) projects the global crisis-induced ‘jobs gap’ will reach 75 million in 2021, before falling to 23 million in 2022. The related gap in working-hours, which includes the jobs gap and those on reduced hours, amounts to the equivalent of 100 million full-time jobs in 2021 and 26 million full-time jobs in 2022. This shortfall in employment and working hours comes on top of persistently high pre-crisis levels of unemployment, labour underutilization and poor working conditions.

In consequence, global unemployment is expected to stand at 205 million people in 2022, greatly surpassing the level of 187 million in 2019. This corresponds to an unemployment rate of 5.7 per cent. Excluding the COVID-19 crisis period, such a rate was last seen in 2013.

The worst affected regions in the first half of 2021 have been Latin America and the Caribbean, and Europe and Central Asia. In both, estimated working-hour losses exceeded eight per cent in the first quarter and six per cent in the second quarter, compared to global working-hour losses of 4.8 and 4.4 per cent in the first and second quarter, respectively.

Global employment recovery is projected to accelerate in the second half of 2021, provided that there is no worsening in the overall pandemic situation. However this will be uneven, due to unequal vaccine access and the limited capacity of most developing and emerging economies to support strong fiscal stimulus measures. Furthermore, the quality of newly created jobs is likely to deteriorate in those countries.

The fall in employment and hours worked has translated into a sharp drop in labour income and a corresponding rise in poverty. Compared to 2019, an additional 108 million workers worldwide are now categorized as poor or extremely poor (meaning they and their families live on the equivalent of less than US$3.20 per person per day). “Five years of progress towards the eradication of working poverty have been undone,” the report says, adding that this renders the achievement of the UN Sustainable Development Goal of eradicating poverty by 2030 even more elusive.

The COVID-19 crisis has also made pre-existing inequalities worse by hitting vulnerable workers harder, the report finds. The widespread lack of social protection – for example among the world’s two billion informal sector workers – means that pandemic-related work disruptions have had catastrophic consequences for family incomes and livelihoods.

The crisis has also hit women disproportionately. Their employment declined by 5 per cent in 2020 compared to 3.9 per cent for men. A greater proportion of women also fell out of the labour market, becoming inactive. Additional domestic responsibilities resulting from crisis lockdowns have also created the risk of a “re-traditionalization” of gender roles.

Globally, youth employment fell 8.7 per cent in 2020, compared with 3.7 per cent for adults, with the most pronounced fall seen in middle-income countries. The consequences of this delay and disruption to the early labour market experience of young people could last for years.

The pandemic’s impact on young people’s labour market prospects is laid out in greater detail in an ILO brief published alongside the WESO Trends. The Update on the youth labour market impact of the COVID-19 crisis  also finds that gender gaps in youth labour markets became more pronounced.

“Recovery from COVID-19 is not just a health issue. The serious damage to economies and societies needs to be overcome too. Without a deliberate effort to accelerate the creation of decent jobs, and support the most vulnerable members of society and the recovery of the hardest-hit economic sectors, the lingering effects of the pandemic could be with us for years in the form of lost human and economic potential and higher poverty and inequality,” said ILO Director-General, Guy Ryder. “We need a comprehensive and co-ordinated strategy, based on human-centred policies, and backed by action and funding. There can be no real recovery without a recovery of decent jobs.”

As well as looking at working hour and direct employment losses, and foregone job growth, the WESO outlines a recovery strategy structured around four principles: promoting broad-based economic growth and the creation of productive employment; supporting household incomes and labour market transitions; strengthening the institutional foundations needed for inclusive, sustainable and resilient economic growth and development; and using social dialogue to develop human-centred recovery strategies.

Continue Reading

Publications

Latest

Economy35 mins ago

The free trade vision and its fallacies: The case of the African Continental Free Trade Area

The notion of free trade consists of the idea of a trade policy where no restrictions will be implemented on...

Africa Today2 hours ago

Mozambique: Violence continues in Cabo Delgado, as agencies respond to growing needs

Civilians continue to flee armed conflict and insecurity in northern Mozambique, more than two months after militants attacked the coastal city of Palma, located in...

Americas5 hours ago

Who benefits more from the Biden-Putin summit in Geneva?

With the Putin-Biden summit in Geneva around the corner, the question is who actually benefits more from the meeting in...

Economy6 hours ago

Turning to sustainable global business: 5 things to know about the circular economy

Due to the ever-increasing demands of the global economy, the resources of the planet are being used up at an...

Reports8 hours ago

How the Pandemic Stress-Tested the Increasingly Crowded Digital Home

The average U.S. household now has a total of 25 connected devices, across 14 different categories (up from 11 in...

small-business-economy small-business-economy
Finance8 hours ago

Top 5 Examples of Best Nonprofit Grant Proposals

Introduction Compiling a grant proposal is a complicated task. Nonprofits have to conduct ample amounts of research, create multiple drafts...

Energy News10 hours ago

It’s time to make clean energy investment in emerging economies a top global priority

The world’s energy and climate future increasingly hinges on whether emerging and developing economies are able to successfully transition to...

Trending