Shows recovery from 1.6% growth recorded in 2Q but lower in comparison to 3.5% a year ago
Stronger showing of 3.3% growth in industry, 2.8% in services
Agriculture fails to impress with just 0.4% growth
7.5% contraction in accommodation and food services showing slow recovery in tourism
Manufacturing growth driven by food, apparel, mineral products
Trade, transportation, financial services drive growth
IT programming, consultancy, related services jump 20.5% in 3Q
Telecommunications grow by 11%
Sri Lanka’s economy grew by 2.7% in the third quarter of 2019, recovering somewhat from the Easter Sunday attacks that slashed the previous quarter growth to a five-year low of 1.6%, and showing stronger expansion in the industry and services segment, the Census and Statistics Department said yesterday. In the corresponding quarter of last year, GDP grew by 3.5%.
The economy grew at its slowest pace in more than five years from April to June 2019, with 2Q showing only a 1.6% gain, slowing from a growth rate of 3.7% the first quarter. However, the impact on some segments including the accommodation, food and beverage service activities were slower by 7.5% when compared to the third quarter of 2018, data showed. Agriculture also failed to show a significant growth despite better weather seen in 2019, the Census and Statistics (CSD) said.
Issuing a communique on releasing National Accounts Estimates for the third quarter of 2019, the department stated that the GDP growth rate for the third quarter of 2019 has been estimated as 2.7%.
The Gross Domestic Product for Sri Lanka for the third quarter of 2019 at current price and constant (2010) price have reached up to Rs. 4,027,051 million and Rs. 2,507,363 million respectively against the current and constant (2010) prices of Gross Domestic Product reported for the third quarter of 2018 which was recorded as Rs. 3,692,822 million and Rs. 2,441,796 million respectively.
“The four major components of the economy; ‘Agriculture’, Industry’, Services’ and ‘Taxes less subsidies on products’ have contributed their share to the GDP at current prices by 6.9%, 26.8%, 60% and 6.2% respectively in the third quarter of 2019,” the department said.
“During the third quarter of 2019, Industry and Services activities recorded substantial growth rates of 3.3% and 2.8% respectively, while Agriculture activities recorded a slight positive growth rate of 0.4%.”
Among the sub activities of ‘Agriculture’ ‘Growing of Oleaginous fruits; including Coconut’, Fresh water fishing’ ‘Growing of Tea’ and Growing of Cereals’ have reported an outstanding positive growth rates of 13.9%, 10.9%, 10% and 8.1% respectively in the third quarter of 2019 compared to the third quarter of 2018.
In addition. ‘Growing of Vegetables’, Forestry and Logging’, Growing of Fruits’ and ‘Growing of other perennial crops’ have reported considerable positive growth rates of 5.1%, 3.6%, 3.5% and 3.1% respectively in the third quarter of 2019. However some of the major agriculture activities have reported negative growth rates in this quarter when compared to the same quarter in 2018. Among those sub activities, “Growing of Rubber’, ‘Plant propagation’, Marine fishing’, ‘Animal production’ and ‘Growing of Rice’ have reported a substantial contraction during this quarter by 19.9%, 13.7%, 8.2%, 6.2% and 4.3% respectively.
The ‘Industrial activities’, which shared the GDP by 26.8% at current price, has continued to expand further by 3.3% significantly. The overall manufacturing activities have grown by 2.5% during the third quarter of 2019, supported mainly by the sub-activities of ‘Manufacture of food, beverages and tobacco’ and Manufacture of textile and wearing apparels’, which recorded positive growth rates of 5% and 5.1% respectively during this period.
In addition, ‘Manufacture of other non-metallic mineral products’ has reported significant positive growth rate of 9.3% while Manufacture of chemical products’ has reported slight positive growth rate of 1.5% during this quarter.
However, performances of some manufacturing activities have reported contraction during this quarter when compared to the third quarter of 2018. Specifically ‘Manufacture of paper products’, Manufacture of basic metal and fabricated metal products’, ‘Other manufacturing, repair, installation of machinery and equipment’ and Manufacture of furniture’ activities reported negative growth rate of 8.2%, 7.3%, 6.1% and 5.3% respectively during this quarter.
Among the ‘Industrial activities,’ ‘Mining and quarrying’ and ‘Construction’ which contributes high share of 2.3% and 6.7% to the GDP have reported considerable growth during this quarter by 5% and 4.6% respectively. in addition, ‘Electricity’, ‘gas’, ‘steam and air conditioning supply’, ‘Water collection, treatment and supply’ and ‘Sewerage, waste treatment and supply’ have recorded 1.5%, 4.9% and 8.5% of positive growth rates during this quarter.
In the third quarter of 2019, the ‘Services’ activities which gives the highest contribution to the GDP by 60%, have reported positive remarkable growth of 2.8%. This 2.8% of Services sector growth mainly driven by the services activities of ‘Wholesale and retail trade’, ‘Transportation of goods and passengers’, ‘financial services’ and ‘Other personnel services’ which are the highest contributing services activities to the GDP. Those activities reported growth rates as 2.1%, 1.4%, 6.9% and 3% respectively.
In addition, ‘IT programming, consultancy and related services’ even though its share to the GDP is low (0.2%), has reported an outstanding performance of 20.5% of growth rate during the third quarter of 2019, when compared to the same quarter in the year 2018. Further the sub-activity of ‘Telecommunication’ grew significantly by 11.1% during this quarter. However, the sub-activity of ‘Accommodation, food and beverage serving activities’ has reported a contraction by 7.5% during this quarter when compared to the third quarter of 2018, showing the continuous adverse impact of the Easter Sunday attacks on the tourism industry.