Around 43% of young Sri Lankans with postsecondary education are unemployed, according to data presented by the International Monetary Fund (IMF), highlighting a widening gap between educational qualifications and employment opportunities.

The figure is significantly higher than the corresponding rate of around 19% for the rest of the world, placing Sri Lanka at the highest end of the IMF’s comparison of youth unemployment among those with advanced education.

The data highlight the particularly difficult transition from education to employment facing young people in Sri Lanka and other South Asian economies, with more than four in every 10 young Sri Lankans with postsecondary qualifications represented as unemployed.

The IMF has identified a broader regional problem in which highly educated young workers struggle to find jobs that match their qualifications. The situation reflects a persistent mismatch between the skills produced by education systems and those demanded by employers.

For Sri Lanka, the challenge comes as the country continues to recover from a severe economic crisis that disrupted employment, incomes and household living standards. Young people entering the labour market also face the challenge of finding suitable employment in an economy undergoing structural and technological change, according to the IMF.

The issue is becoming more pressing as artificial intelligence and automation transform workplaces. While new technologies have the potential to increase productivity, attract investment and generate new forms of employment, they may also reduce demand for some entry-level tasks if workers’ skills fail to keep pace with changing requirements.

The IMF has stressed the need for education and reskilling systems to become more responsive to changing labour-market needs. Universities, vocational institutions and technical programmes need to ensure that graduates acquire skills that correspond with employer demand.

For Sri Lanka, this means addressing not only the availability of jobs but also the quality and relevance of employment opportunities for graduates.

Stronger links between universities, industry and skills-training institutions could help narrow the gap between educational qualifications and labour-market demand, the IMF noted.