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Growing of rice saw a 19.8% in the second quarter of this year
The contraction in the economy during the second quarter had reduced to 3.1% year-on-year (YoY) reflecting rebound from 11.5% shrinkage in the first three months of 2023.
The Department of Census and Statistics (DCS) Sri Lanka, yesterday released the estimated Gross Domestic Product (GDP) at current price and at constant (2015) price in the production approach and the other macroeconomic indicators for the second quarter (1 April to 30 June).
It said the YoY GDP growth rate for the second quarter of year 2023 has been reported as 3.1% of negative growth rate.
In the second quarter of 2023, the overall Industry and services activities declined by 11.5% and 0.8% respectively while overall agriculture activities grew by 3.6%. The three major economic activities of the economy; ‘Agriculture’, ‘Industry’ and ‘Services’ have contributed their share to the GDP at current prices by 10.4%, 27.0% and 56.8% respectively, while ‘Taxes less subsidies on products’ component has contributed 5.8% of share to the GDP in the second quarter of year 2023.
The GDP for Sri Lanka for the second quarter of year 2023 at constant price (2015) has declined up to Rs. 2,597,441 million from Rs. 2,680,074 million which was recorded in the second quarter of year 2022.
In addition, the Gross Domestic Product for Sri Lanka for the second quarter of 2023 at current price has increased up to Rs. 6,145,451 million from Rs. 5,442,362 million which recorded in the same quarter in year 2022 registering 12.9% of positive change in the current price GDP.
DCS said in the second quarter of 2023, the pressure on short-term and long-term investments caused by high interest rates in the economy remained in force.
Along with that it was observed that the consumption pattern of the general public was limited to consumer goods due to the pressure derived through the reduction in real income of them (general public). Further, as a whole, expectations of domestic producer’s about the economy were at a lower level and continued to grow slowly and this was specially affected by the uncertain situation related to exchange rates. Moreover, the high input costs have led to the deterioration of international competitiveness in terms of exports and as a result a decrease in export volumes could be observed.
As a result, in the second quarter of 2023, manufacturing industrial activities, construction activities and mining and quarrying activities have reported considerable declines. As well, financial services activities, IT programing consultancy and related activities and professional services have recorded contractions further.
Performance in Agricultural Activities
In the second quarter of 2023, the agriculture activities recorded an expansion of 3.6% compared to the same quarter of 2022.
The expansion in the agricultural activities were mainly driven by ‘Growing of cereals’ (44.4%), ‘Plant propagation’ (20.1%), ‘Growing of rice’ (19.8%), ‘Agriculture supporting activities’ (13.2%), ‘Growing of tea’ (7.1%), ‘Growing of vegetables’ (6.9%), ‘Growing of rubber’ (5.8%), ‘Growing of spices’ (5.1%), ‘Growing of fruits’ (3.8%), ‘Marine fishing and marine aquaculture’ (1.3%) and ‘Animal production’ (0.6%). However, some agricultural economic activities such as ‘Fresh water fishing and freshwater aquaculture’ (14.0%), ‘Forestry and logging’ (11.6%) and ‘Growing of oleaginous fruits’ (8.4%) have recorded negative growth rates in this quarter.
Performance in Industrial Activities
During the second quarter of 2023, the overall industrial activities have reported a contraction of 11.5% compared to the same quarter of the previous year.
Among the ‘Industrial activities’, the ‘Construction’ and ‘Mining and quarrying’ activities have recorded negative growth rates of 23.1% and 24.3% respectively. The overall manufacturing industry contracted by 5.1% during this quarter indicating a drawback in this sector. Most manufacturing activities have reported contractions in this quarter with respect to the same quarter of the year 2022. Mainly ‘Manufacture of rubber and plastic products’ (26.5%), ‘Manufacture of paper and paper products’ (25.0%), ‘Manufacture of wood and wood products’ (21.4%), ‘Manufacture of textiles, wearing apparel, leather and other related products’ (18.4%), ‘Manufacture of furniture’ (12.3%), ‘Manufacture of machinery and equipment’ (8.1%) and ‘Manufacture of basic metal and fabricated metal products’ (1.9%) have reported declines during this period.
However, manufacturing activities such as ‘Manufacture of coke and refined petroleum products’ (473.2%), ‘Manufacture of chemical products’ (4.3%) and ‘Manufacture of food, beverages and tobacco products’ (3.2%) have recorded expansions in this quarter compared to the same quarter of the year 2022.
The ‘Electricity, gas, steam and air conditioning supply’ and ‘Water collection, treatment and supply’ activities have also recorded 0.9% and 3.8% of contractions in this quarter.
Performance in Services Activities
In the second quarter of the year 2023, the performance of the service sector has declined by 0.8% compared to the same quarter of the year 2022.
According to the quarterly review, ‘Financial service activities’ has reported significant downturn of 18.8%. Further, ‘Professional services’ (9.3%), ‘IT programing consultancy and related activities’ (8.5%), ‘Telecommunication’ (4.4%), ‘Human health services’ (2.6%), ‘Real estate activities and ownership of dwelling’ (2.5%) activities and ‘Insurance services’ (1.3%) have reported considerable negative growth rates during this quarter.
Moreover, activities such as ‘Accommodation, food and beverage serving activities’ (34.2%), ‘Programing and broadcasting activities’ (6.2%), ‘Transportation of goods and passengers including warehousing’ (5.4%), ‘Postal and courier services’ (3.2%), ‘Educational services’ (3.0%), ‘Other personal services’ (1.3%) and ‘Wholesale and retail trade’ (0.3%) have reported positive growth rates during the second quarter of 2023.
