Heat stress to drain $26bn from Sri Lanka economy by 2040

Sri Lanka faces severe economic consequences from escalating heat stress, according to a new assessment by the International Labour Organization (ILO). The organisation projects that by 2040, heat-related productivity losses could reach $26 billion per year, while approximately 145,000 jobs may be eliminated as temperatures continue to rise across the island nation.

The forecasts underscore the vulnerability of Sri Lanka's workforce to climate change, particularly in temperature-sensitive sectors. Agriculture and construction are expected to bear the brunt of the impact, given the outdoor nature of these industries and the concentration of workers exposed to extreme heat conditions.

The projections highlight the interconnection between climate change and economic development in South Asia's most vulnerable regions. Heat stress reduces worker productivity, increases health-related absences, and creates occupational hazards that threaten livelihoods across multiple industries. For an economy already navigating significant challenges, the prospect of losing substantial human capital to climate impacts presents an additional layer of complexity.

The ILO assessment arrives as policymakers globally grapple with climate adaptation strategies. Sri Lanka, as a lower-middle income nation with a substantial population dependent on climate-sensitive sectors, faces particular pressure to develop mitigation measures that protect both workers and economic output. The findings suggest that failure to act on climate resilience could have cascading consequences for employment, household incomes, and overall economic growth throughout the coming decades.