The escalating war in the Gulf could place significant pressure on Sri Lanka’s economy, according to Hilmy Cader, Chief Executive Officer of MTI Consulting.
Commenting from Bahrain, Cader said the economy may face a stress test if the conflict intensifies further.
However, the closure of Gulf airspace could disrupt these connections. In addition, European airlines operating directly to Sri Lanka may also face operational constraints.
As a result, hotel bookings could decline in the immediate term if travel uncertainty continues.
Trade and export exposure
Cader also noted that disruptions to cargo flights could affect perishable and time-sensitive exports.
Furthermore, nearly 50% of Sri Lanka’s tea exports, valued at approximately US$ 1.5 billion, are destined for Middle Eastern markets. Prolonged instability in the region could therefore impact export earnings.
Remittances at risk
The Gulf region remains a major employment destination for Sri Lankan workers. With nearly one million Sri Lankans employed in Gulf countries, any slowdown in regional business activity could affect job security and, consequently, remittance inflows.
Remittances represent a critical source of foreign exchange, and sustained disruption may weigh on external sector stability.
MTI Consulting is an internationally networked strategy consultancy that has conducted assignments in 51 countries over the past 29 years.
Last modified: March 3, 2026
