Sri Lanka Faces Risks from Shrinking Workforce: IMF

14-Oct-2026

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Sri Lanka must accelerate digitalisation, improve productivity and increase labour force participation to sustain long-term economic growth amid its rapidly ageing population, the International Monetary Fund (IMF) has stressed.

The IMF highlighted these concerns in its analytical report titled Shaping Asia’s Future: Opportunities and Challenges.

The report identifies Sri Lanka as one of the Asian economies facing significant pressure from a shrinking working-age population and a growing elderly population, as demographic advantages diminish.

The IMF also warned that demographic changes were emerging as a major long-term challenge for the country, with potential implications for labour supply, productivity, pension systems, healthcare expenditure and economic growth.

The report further emphasised that future economic growth could not depend solely on expanding the workforce. Greater attention would also have to be given to improving productivity, adopting technology and making effective use of human capital.