Impact on Tourism, Tea, Energy, Supply Chain and Remittances

Commenting from Bahrain, the CEO of MTI Consulting has cautioned that the Sri Lankan economy could be stress-tested as the war in the Gulf escalates.

According to Hilmy Cader, the airlines from the 6 Gulf Countries have around 140 scheduled commercial flights a week, which is the main channel for European tourist into Sri Lanka.

This compounded by the closure of Gulf airspaces, will also curtail the European Airlines directly flying into Sri Lanka. Overall, the impact on hotel bookings in the immediate future can be significant. Sri Lankan exports of perishables and time-sensitive exports can also be impacted by disruption to cargo flights.

He further highlighted that almost 50% of Sri Lankan Tea and about US$ 1.5 billion of exports are destinated to the Middle East.  With almost 1 million Sri Lankan working in the Gulf, the economic impact to Gulf-based business could impact employment numbers and therefore remittances.  Oil prices in Sri Lanka are likely to rise as the Gulf turmoil disrupts crude supply routes through the Strait of Hormuz, driving global market volatility and higher import costs.

MTI Consulting (www.mtiworldwide.com) is an internationally networked strategy consultancy, having carried out assignments in 51 countries over the past 29 years.