Impact of the Sri Lankan government economic reform programmes on the construction industry since year 2022

Abstract

The recent economic crisis in Sri Lanka has had a devastating impact on each economic sector, and the construction sector is no exception. Hence, the Sri Lankan government has entered into an agreement with the International Monetary Fund (IMF) to perform an economic reform programme to uplift the country from its insolvent position. However, there is a lack of studies on the impact of economic reforms on the construction industry. Hence, this research aims to identify the impacts of the current economic reform programme of the Sri Lankan government on the construction sector. A comprehensive literature review was conducted to understand the economic crisis, the economic reform programme and its impact on Sri Lanka. Further, under the qualitative research approach, 20 semi-structured interviews were conducted with the experts in the construction sector selected through purposive sampling. The collected data was analysed through code-based content analysis using N-Vivo software and manual content analysis. According to the findings, import restrictions, increased material prices and fuel shortages were highlighted as the major challenges faced by the industry, which led to project terminations, staff turnover, increased construction costs, and bankruptcies. Further, IMF programme objectives such as restoring macro economy, ensuring debt sustainability, establishing export-driven economy and emphasising anti-corruption are appreciated by the experts while highlighting the need for more objectives to be included in future revisions. . Findings of this study can be utilised by the government to improve its reform programme in future to safeguard the construction industry.