ECONOMYNEXT – Sri Lanka’s gross domestic product grew 12.3 percent in the June 2021 quarter from a low base in 2020, when the economy contracted 16.4 percent in the worst fall in recorded history amid a Coronavirus lockdown, the state statistics office said.
Agriculture grew 8.1 percent and industry grew 22.1 percent and services 7.5 percent.
Despite the double digit growth, GDP at constant prices at 2.17 trillion was a little below the 2.312 trillion in 2019.
In nominal terms, GDP was 3.626 trillion, higher than the 3.589 in 2019.
In agriculture Marine fishing grew 24.7 percent), animal production 18.0 percent), rubber 15.7 percent), Coconut’ (14.0 percent), tea (13.4 percent), Fresh water fishing (7.6 percent), Growing of cereals’ (6.6 percent), Growing of fruits (6.5 percent), ‘Growing of spices’ (4.7 percent), ‘Forestry and logging’ (4.2 percent).
However, during this quarter, Growing of rice’ had contracted 5.1 percent and ‘Growing of vegetables contracted 4.5 percent.
Manufacturing activities grew 26.5 percent during the second quarter of 202.
The ‘Manufacture of textiles, wearing apparel and leather related products’ by 60.7 percent, while all other manufacturing activities have reported high positive growth rates.
Manufacture of rubber and plastic products was up 66.8 percent), manufacture of furniture 54.4 percent, manufacture of other non-metallic mineral products’ 41.3 percent), Other manufacturing, repair and installation 28.1 percent, manufacture of chemical products’ (13.0 percent).
In services, IT programming consultancy and related activities grew 24.2 percent, Transportation of goods and passenger including ware housing grew 20.4 percent), Telecommunications 19.6 percent, insurance services 14.4 percent, financial service activities 14.3 percent.
Real estate activities grew 5.5 percent, professional services grew 3.4 percent, other personal services 2.6 percent and wholesale and retail trade 1.0 percent.
Sri Lanka has been printing large volumes of money for stimulus and deficit finance (Go Policy) which is spilling over the balance of payments depleting forex reserves, requiring corrective measures (Stop Policy) as forex shortages emerged.
In the year to June 2021, central bank credit to government (printed money) grew 111 percent to 1.17 trillion rupees, driving investments and imports through reserve losses. By July net foreign assets of the central bank was down 98 percent.
By June credit to government was up 44 percent, with wide deficit and state workers at home being paid full salary.
Private credit was up 12.9 percent, with the number also helped by a base effect as credit slowed in 2020 amid a lockdown.
Machinery and equipment imports were 1.42 billion US dollars by June 2021, higher than the 1.23 billion US dollars in the pre-pandemic year of 2019 when there were also tourism revenues.
Intermediate goods import grew to 5.95 billion US dollars up from 5.5 billion US dollars in 2019. (Colombo/Sept16/2021)