SL’s public sector sees real wages slide as inflation bites: WB

For Sri Lanka's public sector workers, the pay raises have failed to keep pace with the soaring inflation, leaving the families struggle to cover the basic living costs, the World Bank said.

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Despite the high nominal growth of wages and pensions over 2018-23, the World Bank noted that high inflation has eroded the purchasing power of the public sector employees and pensioners in recent years. In cumulative real terms, average public sector wages and pensions fell by 33 percent and 26 percent, respectively, over the past three years.

The report warns that the impact has been regressive, disproportionately affecting the low-income civil servants. Data from the 2019 and 2022 Labor Force Surveys indicate that the public sector workers in the bottom 30 percent of the income distribution lost considerably more purchasing power than their private sector counterparts.