Sri Lanka Prosperity Index (SLPI), recorded an index value of 0.796 in 2021 with a slight increase compared to 0.764 recorded in 2020 where the economy was severely affected by the COVID-19 pandemic.
The Census and Statistics Department said marginal increases of ‘Economy and Business Climate’, ‘Well-being of the People’ and ‘Socio-Economic Infrastructure’ subindices have contributed to this slight increment in SLPI.
Overall increase in the Economy and Business Climate sub-index in 2021 was driven by increases in Gross Domestic Product (GDP) per capita in nominal terms, employment, wages and industrial density compared to 2020.
However, the Department said relatively high inflation in 2021 compared to the previous year had detrimental effects on the sub-index.
The marginal increase observed in the Well-being of the People sub-index was predominately due to the facilitation for education and improvements in people’s wealth in 2021 compared to 2020.
However, subdued performance in education, drop in health facilities such as lower availability of medical officers, reduced cleanliness of environment and low engagement in entertainment activities negatively contributed to the performance of the sub-index.
Expansions in electricity supply and telephone facilities as well as the road developments during the year have moderated the negative impact on Socio-Economic Infrastructure sub-index caused by the decline in usage of public transportation facilities, reduced availability of clean and safe drinking water and the higher number of crimes reported during 2021.
Provincial Prosperity
Among the nine provinces, Western province has secured the highest value for the prosperity index in 2021, while Southern and North Western provinces were ranked at the second and third positions, respectively. When considering the change in provincial prosperity index compared to the previous year, North Western province recorded the highest increase followed by Southern and Western provinces. Meanwhile, Uva, Sabaragamuwa and North Central provinces recorded declines in the provincial prosperity index.
Economy and Business Climate Sub-Index
North Western province recorded the highest improvement within the sub-index, mainly due to increments in per capita provincial GDP, employment and informal sector wages. Improvements in the sub index were recorded in Sabaragamuwa, Western and Southern provinces as well, amidst the relatively volatile and high inflation reported in 2021 compared to 2020 in all provinces. The declines of the sub-index in other provinces were mainly caused by deteriorations in employment aspects in 2021.
Well-being of the People Sub-Index
The sub-index improved in all provinces, predominantly due to increased health expenditure, enhanced facilitation for education, increased availability of supermarkets and the low number of reported respiratory diseases which may have resulted from precautions taken against COVID-19. The highest improvement within the sub-index was reported from Eastern province while Sabaragamuwa province reported the lowest increase.
Socio-Economic Infrastructure Sub-Index
Six provinces have recorded marginal increases in the sub-index where the largest increase was reported from Western province. The improvements made to the infrastructure such as electricity, telephone and road developments were the key reasons for the increases in the sub-index. Meanwhile, the declines of the subindex were reported in Sabaragamuwa, Uva and North Central provinces due to reduced availability of safe drinking water and less usage of public transportation.
Technical Note:
Prosperity Index
The index is compiled using 41 variables, which are categorised into three sub-indices. All sub-indices have equal weights in prosperity index. The Economy and Business Climate sub-index is compiled using 9 variables categorised into the aspects of price stability, living standard, income, poverty, employment, industrial density, and banking density. In compiling the Well-being of the People sub-index, 22 variables pertaining to the aspects of availability of healthcare facilities, availability & quality of education facilities, wealth, availability & usage of entertainment facilities, air quality and purity of environment are used. Socio-Economic Infrastructure sub-index includes 10 variables and the relevant aspects are availability of transport facilities, availability of road coverage, availability of telecommunication facilities, availability of ICT facilities, availability of electricity, availability of safe and quality drinking water, availability of sanitation and crime-free environment.
