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Friday Nov 15, 2024
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Despite the contraction in the third quarter, the country’s economy has grown by 4.4% in the first nine months of this year, the Department of Census and Statistics said yesterday.
In a follow-up announcement to Wednesday’s release of 3Q GDP data, DCS said the GDP in the first nine months of 2021 was Rs. 7 trillion up from Rs. 6.7 trillion in 2020 and Rs. 7.15 trillion in 2019 corresponding period.
The 3Q in 2021 suffered the first contraction of 1.5% after year-on-year growth in the previous four quarters.
DCS in its statement said the COVID-19 pandemic has hit the Sri Lankan economy hard in recent times. Accordingly, the Gross Domestic Product (GDP) for the year 2020 had recorded a decline of 3.6% compared to the year 2019. In the first nine months of 2020, the GDP had declined by 5.4% compared to the first nine months of 2019.
During the first quarter of 2021, the Sri Lankan economy recorded a positive growth of 4.3%. This is a satisfactory growth compared to the decline of 1.8% recorded in the first quarter of 2020.
As the travel restrictions were not in effect during this quarter and the lifestyle of general public has become a new normal, the economic activities of the country were functioning at satisfactory level in this period.
However, as the third wave of the COVID-19 pandemic began in late April 2021 and spread across the island, travel restrictions were imposed for a month from 21 May to prevent the spread of the pandemic, but it was not as severe as the previous year. During this imposed travel restriction period, many economic activities were carried out in accordance with the health guidelines. As a result, the GDP grew by 12.3% in the second quarter of 2021 compared to the GDP recorded for the second quarter of 2020. High growth rates were recorded in all the three sectors of Agriculture, Industry and Services during this quarter.
Due to the spread of the pandemic throughout the country in the third quarter of 2021, the Government-imposed quarantine curfew throughout the island from midnight of 20 August 2021 to control the spread of the pandemic. The quarantine curfew was extended from time to time and lasted for 41 days until the end of September. During this period, the closure of the country disrupted the services activities, such as transportation, personal services and accommodation and food serving, as well as some declines recorded in some manufacturing and construction activities too. The country’s foreign exchange issues and the restrictions on imports have also pushed up the prices of intermediate inputs and led to slow down the economic activities. As a result, the Sri Lankan economy contracted by 1.5% in the third quarter of 2021.
