Persistently elevated rates of child stunting underscore the incomplete and uneven recovery from Sri Lanka’s 2022 economic collapse, with poverty and real wages still lagging pre-crisis levels despite macroeconomic stabilisation.

The World Bank’s latest Sri Lanka Development Update, titled From Recovery to Transformation and released in early October 2026, highlights persistently high rates of child stunting as clear evidence of the lasting impact of the 2022 economic crisis on the most vulnerable.

Sri Lanka’s economy has clawed its way back to pre-crisis output levels, yet the youngest generation continues to bear the deepest scars, the report says.

Stunting – a condition in which children under five are significantly shorter than expected for their age due to chronic or recurrent undernutrition – rose from 7.4 per cent in 2021 to 10.1 per cent in 2025, according to the report. This reversal of earlier gains signals that the crisis’s effects on household nutrition, maternal health, and early childhood development have not fully receded even as gross domestic product has recovered.

Economic Rebound Masks Household Hardship

The broader picture painted by the World Bank is one of real but incomplete recovery. Poverty, measured at the $4.20-a-day line for lower-middle-income countries, is estimated at 16.9 per cent in 2025. That figure is down from a crisis peak of 20.7 per cent in 2023 but remains substantially above the 11.5 per cent recorded in 2019. Real wages are still approximately 12 per cent below pre-2019 levels, and labour force participation has only partially recovered.

In 2026, two-fifths of Sri Lankans are either poor or live within 50 per cent of the poverty line, leaving a large share of households highly vulnerable to further shocks. Renewed inflationary pressures, partly linked to higher energy and food prices stemming from conflict in the Middle East, stalled progress in real incomes during the first half of the year. Transport costs, a significant burden for informal and low-skilled workers, rose by about 21 per cent.

Growth itself is expected to moderate. After expanding 4.7 per cent in the first half of 2026 and returning output to 2018 levels, full-year growth is projected at 4.4 per cent in 2026 before easing to 4.2 per cent in 2027 as the post-crisis rebound fades and underlying productivity remains weak.

Regional Disparities Deepen the Challenge

The recovery has been highly uneven geographically. Poverty rates outside the Western Province are two to three times higher than within it, reaching 36 per cent in the estate sector in 2024. The poverty gap – the average shortfall between what poor households have and what they need – doubled nationally between 2019 and 2024 and is four times larger in the Northern Province than in the Western Province.

These disparities are mirrored in nutrition outcomes. National Nutrition Month data from Sri Lanka’s Family Health Bureau show that while overall stunting edged down slightly from 10.5 per cent in 2024 to 10.1 per cent in 2025, the estate sector and districts such as Nuwara Eliya continue to report far higher rates – above 22 per cent in some cases. Underweight prevalence among children under five remains elevated at around 16–17 per cent, well above the lows recorded just before the crisis.

Stunting is particularly concerning because its consequences are largely irreversible – children who experience chronic undernutrition in the critical first 1,000 days of life often never reach their full physical or cognitive potential. They face higher risks of learning difficulties, lower adult earnings, and reduced participation in society – outcomes that compound inequality across generations.

Roots of Persistent Undernutrition

Sri Lanka had made notable progress in reducing stunting over earlier decades, bringing rates down from more than 30 per cent in the late 1980s. Yet progress stagnated in the years before the crisis, and the sharp economic contraction of 2022 reversed hard-won gains. Low birth weight, inadequate maternal nutrition, poor dietary diversity in early childhood, and repeated infections all contribute. Socio-economic factors remain powerful predictors: children in the poorest households, those born to less-educated mothers, and those living in the plantation sector face substantially higher risks.

The crisis intensified these pressures. Households cut back on nutritious foods, maternal health services were disrupted, and many families depleted savings. Even as macroeconomic indicators improved, the buffers that protect young children were slow to rebuild. Recent data also show that low birth weight remains a significant issue, with roughly one in five births affected in recent surveys, further elevating the risk of later stunting.

Policy Imperatives for Lasting Recovery

The World Bank argues that moving from recovery to genuine transformation requires shifting the growth model toward private investment, exports, and productivity gains rather than continued reliance on public spending. Strengthening social protection systems, particularly Sri Lanka’s Aswesuma social security programme, is essential so that support can scale rapidly when new shocks hit. Improving targeting and responsiveness remains a priority.

Health officials have acknowledged that traditional approaches have not fully resolved the stunting puzzle and are exploring new measures. Multi-sectoral strategies that address maternal nutrition, promote diverse complementary feeding, improve water and sanitation, and support women’s education and economic participation are widely recognised as necessary. Health officials say that nutrition-specific interventions must also evolve. 

Sri Lanka’s experience offers a cautionary lesson. Even countries with relatively strong public health systems and education indicators can see rapid deterioration in child development outcomes when economic shocks hit hard and social safety nets are stretched. The scars of such crises often last longest in the bodies and brains of the youngest citizens.