Saturday Jan 18, 2025
Saturday Jan 18, 2025
Wednesday, 18 December 2024 00:00 - - {{hitsCtrl.values.hits}}
Sri Lanka’s economy grew by 5.5% year-on-year (YoY) in the third quarter of 2024 — highest since 2021, whilst continuing the upward momentum seen since September 2023.
In terms of quarter-on-quarter, 3Q performance was higher than 4.7% growth achieved in 2Q.
The Department of Census and Statistics (DCS) said 3Q positive growth was driven by the industry sector accounting for 27.3% of the GDP, growing by a high 10.8%, whilst the service sector with a share of 55.5% of the GDP expanded by 2.6% and the agriculture accounting for 8.2% of GDP expanded by 3% as against the third quarter of last year.
In addition, taxes less subsidies on products accounting for 8.9% of the GDP grew by 13.3% in the third quarter of 2024.
“A sharp decline in interest rates was noticed towards the end of the third quarter of 2024, which eased the domestic credit supply especially to the private sector. A noteworthy increase in export and import quantities were identified in the third quarter of 2024, which facilitated most of the economic activities by providing forward and backward linkages to prosper,” DCS said.
It also added that increase in imports of investment goods as well as intermediate goods such as textile and textile articles and cement mainly facilitated to the recorded high growth in apparel industry and construction industry respectively.
Moreover, DCS noted that increased earnings from Tourism and Workers’ Remittances inflows strengthened the country’s foreign currency stance with the simultaneous uplift in country’s rupee value in the foreign currency market.
From the domestic front, it said the increased water stocks in reservoirs further increased the hydro electricity generation and relatively high production of eggs and poultry supported animal production activity to report a remarkable positive growth rate in the third quarter of 2024.
Following is a brief commentary on the sectoral performance;
Agricultural activities
In the third quarter of year 2024, the agriculture activities have recorded an expansion of 3% when compared to the 4.2% of growth recorded in the same quarter in the year 2023.
The reported 3% growth in the agricultural activities were supported by the expansions in ‘Growing of cereals’ (46.7%), ‘Animal production’ (19.9%), ‘Growing of tea’ (16.3%), ‘Marine fishing and marine aquaculture’ (9.9%), ‘Growing of fruits’ (7.3%), ‘Growing of spices, aromatic drug and pharmaceutical crops, ‘ (5.7%), ‘Growing of rice’ (4.3%), and ‘Growing of sugarcane’ ( 1.9%).
Meanwhile, some agricultural activities, namely, ‘Fresh water fishing and fresh water aquaculture’ (11.6%) ‘Growing of oleaginous fruits’ (11.5%), ‘Forestry and logging’ (9.6%), ‘Growing of rubber’ (9.3%), ‘Agriculture supporting activities’ (6.8%), ‘Growing of other perennial crops’ ( 4.8%), ‘Growing of coffee, cocoa and other beverages crops (4.3%), ‘Plant propagation’ ( 3.2%) and ‘Growing of vegetables’ (0.8%) reported contractions in the third quarter of 2024.
Industrial activities
All the industrial activities together reported a 10.8% growth in the third quarter of 2024 compared to the reported 0.7% decline in the third quarter of the previous year.
The ‘Construction industry’ and ‘Mining and quarrying’ industries again returned with positive growths of 23.8% and 25.4% respectively in this quarter.
Besides, the overall manufacturing industry grew by 5.3% during the third quarter 2024 with the expansions of some of the more important manufacturing sub activities, namely – ‘Manufacture of textiles, wearing apparel, leather and other related products’ (13.5%), ‘Manufacture of paper and paper products’(10.9%), ‘Manufacture of wood and wood products’ (10.7%), ‘Manufacture of rubber and plastic products’ (9%), ‘Manufacture of basic metal and fabricated metal products’(7.2%), ‘Manufacture of machinery and equipment’(4.4%), ‘Manufacture of furniture’ (2.3%), ‘Other manufacturing and repair and installation of machinery and equipment’ (2.3%), ‘Manufacture of food, beverages and tobacco products’ (1.8%) and ‘Manufacture of chemical products and basic pharmaceutical products’ (1.2%). Only two manufacturing sub activities; ‘Manufacture of coke and refined petroleum products’(52.3%) and ‘Manufacture of other non-metallic mineral products’ (3.0%) reported contractions National Accounts Estimates – Third quarter 2024, Production approach, Base year 2015 in the third quarter of 2024. Among other industrial activities; ‘Electricity, gas, steam and air conditioning supply’ and ‘Water collection, treatment and supply’ grew by 15.2% and 5.3% respectively in the third quarter of 2024 while ‘Sewerage, waste treatment and disposals’ activity reporting a 4.7% contraction.
Services activities
Almost all of the services activities recorded expansions in the third quarter of 2024 and collectively reported a 2.6% growth compared to the reported 1.7% contraction recorded in the third quarter of the previous year.
Among the services activities, ‘Accommodation, food and beverage serving activities’ (18.8%), ‘IT
programming consultancy and related activities’ (16%), ‘Insurance, reinsurance and pension funding’ (8.2%), ‘Postal and courier services’ (5.9%), ‘Financial service activities’(5.1%), ‘Real estate activities and ownership of dwelling’ (4.9%), ‘Telecommunication’ (3.6%), ‘Programming and broadcasting activities’ (3%), ‘Transportation of goods and passengers including warehousing’ (2.2%), ‘Education’ (2%), ‘Professional services’ (1.5%), ‘Wholesale and retail trade’ (1.0%), ‘Other personal services’ (0.4%) and ‘Human health services’ (0.3%). reported positive growth rates in the third quarter of 2024. On the contrary, only one service activity declined during this quarter, namely ‘Public administration and
Defence’ (1.8%).
