Pandemic pains Western, Northern Provinces most

• Provincial GDP share of country’s hub and war-torn north dips whilst others improve marginally amidst worst economic contraction in recent history

In a year when the country saw its worst contraction in the economy, the effect of the pandemic was most severe in the Western and Northern Provinces whilst others improved, though marginally.

As per Provincial GDP (PGDP) data for 2020 released by the Central Bank this week, amidst outbreak of the COVID-19 pandemic, Western Province continued to be the nerve centre of the economy whilst its share declined, contributing to an overall contraction. The economy shrank by 3.6% in 2020 as opposed to 2.3% growth in the previous year.

CBSL said Western Province secured the largest share (38%) of the country’s nominal GDP. However, due to slowdown in economic activities due to the pandemic situation, the share declined by 1% from 2019. Central (11.3%) and North Western (11%) Provinces were ranked at second and third 

positions, respectively.

PGDP shares increased in the North Western, Southern, Sabaragamuwa, and North Central Provinces while in the Western and Northern Provinces, share decreases could be observed year-on-year.

All the provinces have contributed fairly in terms of the agricultural activities ranging from 7.7% to 17.6% whereas North Western, Southern and Central Provinces were the top contributors to the agricultural activities of the country (Figure 2).

Western Province has pioneered industry activities with a contribution of 44.6% while Central and North Western Provinces became second and third largest contributors.

In terms of service activities, Western Province recorded the highest contribution of 39.3% while Central and Southern Provinces had the second and third highest contributions.

Compared to the previous year, only Sabaragamuwa Province has increased its shares across the three activities. On the contrary, Western Province shares in all the activities declined from the previous year while other provinces have shown a mixed performance (Table 2).

Services activities have dominated in all the provinces with over 50% contribution to the GDP. Industry activities in all provinces are positioned next to the services activities, ranging from 15.1% to 30.8%, while agricultural activities range from 1.8% to 17% across the provinces (Figure 3).

CBSL said Provincial Gross Domestic Product (PGDP) has been computed by the Statistics Department of Central Bank of Sri Lanka (CBSL), using a top-down approach by disaggregating the nominal Gross Domestic Product (GDP) compiled by the Department of Census and Statistics (DCS). In the estimation of PGDP for the provinces, the value of each line item in GDP is apportioned using relevant indicators at the provincial level.