Sri Lanka will cross into “aged” status in 2030, sooner than any other country in South Asia, according to a World Bank report launched on Tuesday.
The report, Demographic Change in South Asia: From Tailwinds to Headwinds for Development, finds that the region that spent decades growing on the back of a swelling workforce is now ageing — and that Sri Lanka is furthest along that path. The country’s working-age share of the population peaked in 2005, the report says, two decades before the regional peak.
South Asia is home to 1.66 billion people, about 24 percent of the world’s population, including 1.17 billion of working age, Daily Mirror reported.
The tailwind is fading
Since 2000, demographic change has added an estimated 0.4 percentage point a year to South Asia’s GDP growth — 0.5 points for India — and the report says the rising working-age share may also have lifted annual labour productivity growth across the region by 0.4 to 1.1 percentage points.
That contribution is about to collapse. Working-age population growth averaged 2.2 percent a year between 1960 and 2023 and is projected to fall to 0.6 percent a year between 2024 and 2050. The demographic contribution to GDP growth shrinks by roughly three-quarters over the same period, to about 0.1 percentage point a year.
Regionally, the working-age share peaks in 2034, and South Asia crosses into aged status in 2049. The timing varies sharply: Bhutan, India and the Maldives have less than a decade before their working-age shares peak, Bangladesh and Nepal about two — and Sri Lanka passed its peak twenty years ago.
The workforce that exists is underused
The report’s second finding is that the region is not making full use of the workers it already has. Only 60 percent of South Asia’s working-age population is employed, against 69 percent in other emerging market and developing economies. Just 34 percent work in the more productive non-agricultural sectors, compared with 51 percent elsewhere.
Among those in work, 88 percent are informally employed — a higher share than in any other emerging-market region and on a par with Sub-Saharan Africa. Informal employees earn 45 to 84 percent less than formal employees in Bangladesh, India, Nepal and Sri Lanka, which the report describes as a large loss of both income and productivity.
Writing in Daily FT on Wednesday, the World Bank’s Vice President for South Asia set out the same findings and added a health dimension: a person born in the region today can expect to live to 72, but only 61 of those years are expected to be healthy. Health systems, long-term care, pension systems and labour markets, the column argues, are not equipped for a population living longer but not necessarily in better health.
Context
The finding lands alongside Sri Lanka’s own demographic data, which has pointed the same way for some time — live births fell to a decade low of 214,570 in recent official figures. An ageing population also bears directly on the tax base the government is working to widen under its Medium-Term Revenue Strategy for 2027–2031, and on the unpaid and informal work that ILO research in Sri Lanka has documented.
A note on one figure
The Daily Mirror report contains an internal inconsistency: an early paragraph states that “Sri Lankans will age by 2023”, while a later paragraph in the same article gives the country’s arrival at aged status as 2030. The World Bank’s own published figures for the report give 2030, and that is the date used here. The 2023 reference appears to be a typographical error.
Not reported
Neither filing gives Sri Lanka’s current share of population aged 65 and over, names the report’s authors, or sets out what policy response the World Bank recommends specifically for Sri Lanka as distinct from the region.