SL faces pressures from Al, trade protections: World Bank economist

Says protected sectors have had negative impact on jobs, sectors in lowtariff regimes have generated most new jobs

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SOUTH Asia's strong growth outlook masks a deep labour-market imbalance that is now intersecting with rapid technological change, creating new vulnerabilities for Sri Lanka, World Bank Economist Dr. Jonah Rexer said delivering the Centre for Poverty Analysis (CEPA) guest lecture on the South Asia Development Update.

He said the region remains the fastest-growing emerging market bloc, with growth projected at around 6% in 2026. But the underlying jobs problem - a working age population expanding faster than employment opportunities - continues to shape economic and social outcomes.

"Growth has not been enough," he said, noting that South Asia has one of the widest gaps globally between labour force growth and job creation. For Sri Lanka, this has translated into persistent pressure on young workers and a weakening link between rising incomes and life satisfaction.

Sri Lanka, he said, reflects this broader trend. The post-crisis rebound has begun to stabilise, but the structural employment challenge remains intact.

Against this backdrop, Dr. Rexer said Artificial Intelligence (AI) is adding a new layer of disruption.