Sri Lanka is among the worst impacted countries in Asia-Pacific due to the ripple effects of the Middle East crisis, according to a new report by UNDP.
The 41-page report titled "Military escalation in the Middle East: Human Development Impacts Across Asia and the Pacific" published on 16 April 2026, shows that Sri Lanka is highly exposed, as 80.2% of migrant-worker departures from the island nation in 2025 were to the Middle East.
Tourist arrivals to the island nation also fell from an average of about 9,976 per day in February this year to 5,956 per day during 1 March to 8 March 2026, a drop of roughly 40%.
Sri Lanka, like its South Asian neighbours, namely Bangladesh, India and Pakistan, faces potential economic strain from weakened exports to the Gulf, which can slash farm incomes, limit access to essential supplies, and stall production.
The estimated losses in tea exports stand at $10m to $15m per week. The report said that trade output losses in the Asia Pacific could range from roughly $97bn to $299bn, equivalent to 0.3% - 0.8% of the total GDP of the region.
The UNDP report draws on assessments from 22 UNDP country offices covering 36 countries in the Asia Pacific region. Around 8.8m people across the 14 countries are at risk of falling into poverty, according to the report.