According to the World Bank’s South Asia Development Update (October 2025), Sri Lanka has positioned itself as one of the most AI-exposed economies in South Asia. This status is characterized by robust growth in AI-related employment, yet it is accompanied by significant risks of workforce displacement.
The report identifies Sri Lanka and Bhutan as having the highest levels of AI exposure in the region, a factor attributed to their comparatively skilled and educated labor pools. This exposure, however, presents a dual-sided challenge. The World Bank cautions that Sri Lanka simultaneously ranks lowest in the region for AI-human complementarity. This indicates a heightened risk of job displacement if the integration of AI technologies outpaces the reskilling of the workforce.
Supporting this trend, data on generative AI adoption reveals that Sri Lanka has the second-highest number of ChatGPT users per capita in South Asia, trailing only the Maldives. Furthermore, the demand for AI skills in the Sri Lankan job market is accelerating faster than anywhere else in the region. In 2025, 7.3% of all white-collar job postings required AI-related skills—the highest regional share—and these roles command a wage premium of nearly 30%.
The economic implications are divergent. While sectors like finance, ICT, and professional services are poised for major productivity gains, roles that are entry-level or mid-skilled—such as call center agents, proofreaders, and certain software development tasks—face an increased risk of automation. The report estimates that while about 15% of jobs in South Asia could see substantial productivity benefits from AI, approximately 7% are at high risk of displacement due to low complementarity.
To harness AI as a force for inclusive growth, the World Bank recommends that Sri Lanka, along with its regional neighbors, strengthen the foundations for a digital transformation. Key policy actions include investing in STEM education and digital literacy, improving reliable electricity and high-speed internet access, and implementing labor mobility reforms. These measures are critical to facilitating workers’ transition into new, AI-augmented roles and preventing the emigration of high-skilled talent.
In conclusion, Sri Lanka stands at a critical juncture. Its skilled workforce and strong ICT base provide a solid foundation to capitalize on AI-driven productivity. However, without decisive and strategic policy intervention, these same advancements could potentially exacerbate economic inequality and displace a segment of the young, moderately educated workforce.
