Friday Nov 08, 2024
FT
Friday Nov 08, 2024
Monday, 18 December 2023 01:47 - - {{hitsCtrl.values.hits}}
Sri Lanka’s economy has shown signs of rebound with the July-September posting a 1.6% improvement ending six quarters of negative growth.
As per provisional data released by the Department of Census and Statistics (DCS) the year-on-year GDP growth rate for the third quarter of 2023 is estimated at 1.6% of positive growth rate.
The Agricultural, Industrial and Services activities expanded by 3%, 0.3% and 1.3% respectively in the third quarter of 2023, DCS said.
The three major economic activities of the economy; ‘Agriculture’, ‘Industry’ and ‘Services’ contributed their share to the GDP at current prices by 7.8%, 28.1% and 57.5% respectively, while ‘Taxes less subsidies on products’ component has contributed 6.5% of share to the GDP in the third quarter of year 2023.
DCS said the third quarter of the year 2023 began with the favourable change in uncertainties in foreign exchange which were observed in previous quarters and the economy and its expectations about the future having been growing at a lower rate, was transformed into a positive state.
The input costs declined parallel to the favourable change in exchange rate and the demand for debts which were at a lower level, showed a positive indication in this quarter along with the reduction in interest rate. With the expansion of the tourism sector, a positive impact could be observed in the service exports during this quarter. Accordingly, accommodation, food and beverage service activities have recorded a high positive growth while agricultural activities have also recorded a positive growth rate in the third quarter of 2023. Moreover, some of the manufacturing industries have also recorded expansions in this quarter.
Performance in Agricultural activities;
In the third quarter of the year 2023, the agriculture activities have recorded an expansion of 3% when compared to the 6.7% of negative growth recorded in the same quarter in the year 2022.
The expansion in the agricultural activities were mainly driven by ‘Growing of cereals’ (33.2%), ‘Marine fishing and marine aquaculture’ (27.5%), ‘Growing of rice’ (23.2%), ‘Agricultural supporting activities’ (20.9%), ‘Animal production’ (5.4%), ‘Growing of fruits’ (5.4%), ‘Growing of coffee, cocoa and other beverage crops’ (3.8%), ‘Growing of vegetables’ (3.2%) and ‘Growing of sugarcane’ (3.1%).
However, some agricultural economic activities such as ‘Plant propagation’ (36.8%), ‘Forestry and logging’ (30.7%), ‘Fresh water fishing and freshwater aquaculture’ (10.3%), ‘Growing of oleaginous fruits’ (6.1%), ‘Growing of other perennial crops’ (3.9%), ‘Growing of spices’ (3.6%), ‘Growing of rubber’ (2.8%), and ‘Growing of tea (1.4%) have recorded negative growth rates in this quarter.
Performance in Industrial Activities;
During the third quarter of year 2023, the overall industrial activities have reported an expansion of 0.3% compared to the 21.3% negative growth rate reported in the same quarter in the year 2022.
Among the ‘Industrial activities’, the ‘Construction’ activity has recorded a negative growth rate of 5.5% while ‘Mining and quarrying’ activity has expanded slightly by 0.7% during this quarter. The overall manufacturing industry has grown by 2.1% during this quarter. Some manufacturing activities have reported expansions in this quarter with respect to the same quarter of the year 2022 including ‘Manufacture of coke and refined petroleum products’(168.6%), ‘Manufacture of basic metal and fabricated metal products’ (29.9%), ‘Manufacture of furniture’ (28.7%), ‘Manufacture of other non-metallic mineral products’ (17.5%), ‘Manufacture of food, beverages and tobacco products’ (11.8%) and ‘Manufacture of chemical products and basic pharmaceutical products’ (4.2%).
However, manufacturing activities such as ‘Manufacture of wood and wood products’ (19.0%), ‘Other manufacturing and repair and installation of machinery and equipment’ (18.9%), ‘Manufacture of rubber and plastic products’ (16.5%), ‘Manufacture of textiles, wearing apparel, leather and other related products’ (10.1%), ‘Manufacture of machinery and equipment’ (11.4%) and ‘Manufacture of paper and paper products’ (1.5%) have recorded declines in this quarter compared to the third quarter of the year 2022.
The ‘Electricity, gas, steam and air conditioning supply’ and ‘Water collection, treatment and supply’ activities have recorded expansions by 4.2% and 11.9% respectively in this quarter.
Performance in Services Activities;
In the third quarter of the year 2023, the performance of the service sector has also expanded by 1.3% when compared to 4.2% shrinkage reported in the same quarter of year 2022.
According to the quarterly review of this quarter, ‘Financial service activities’ has reported 0.5% decline while ‘Insurance services’ have reported 29.6% positive growth. Further, ‘Accommodation, food and beverage serving activities’ (34.9%), ‘Programming and broadcasting activities’ (10.9%), ‘Transportation of goods and passengers including warehousing’ (5.7%), ‘Postal and courier services’ (3.3%), ‘Professional services’ (1.9%), ‘Educational services’ (1.8%), ‘Human health services’ (1.0%), ‘Wholesale and retail trade’ (0.9%) and ‘Other personal services’ (0.6%) have reported considerable positive growth rates during this quarter.
Moreover, activities such as ‘IT programming consultancy and related activities’ (20.1%), ‘Real estate activities and ownership of dwelling’ (5.7%) and ‘Telecommunication’ (2.6%) have reported negative growth rates during the third quarter of 2023.
DCS also said the Gross Domestic Product for Sri Lanka for the third quarter of the year 2023 at constant price (2015) has increased up to Rs. 2,946,107 million from Rs. 2,900,654 million which was recorded in the third quarter of the year 2022. In addition, the Gross Domestic Product for Sri Lanka for the third quarter of 2023 at current price has increased up to Rs. 6,906,891 million from Rs. 6,586,602 million which recorded in the same quarter in year 2022 registering 4.9% of positive change in the current price GDP.
