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Wednesday September 27th, 2023

Sri Lanka GDP growth 1.6-pct in 2019 second quarter

ECONOMYNEXT – Sri Lanka’s gross domestic product expanded 1.6 percent in the second quarter, of 2019 from a year earlier, in the wake of a currency collapse in 2018 and Easter Sunday attacks, data from the state statistics office showed.

In the first half of 2019 GDP was estimated to have grown 2.6 percent.

The agriculture sector grew 1 percent in real terms, amid falling prices.

Industry grew 1.4 percent and services 1.6 percent after adjusting for inflation.

Sri Lanka has seen increasing monetary instability in recent years, with gaps between currency collapses narrowing with the operation of ‘flexible inflation targeting’, with a highly unstable soft-peg labeled a ‘flexible exchange rate’, giving wide discretion for the central bank.

The rupee fell from 153 to 182 to the US dollar in 2018 and private credit has weakened.

The current administration has also not done any growth generating reforms, and continued and earlier state oriented policy.

An attempt at free trade was also stymied with fresh trade controls, due to the unstable ‘flexible exchange rate’ and ended with Nixon-shock style policy responses, critics have said.

The services sector recorded the lowest growth since 2010, with hotels and transport shrinking 0.6 percent, the statistics office said. Hotels were hit by Easter Sunday bombs.

Information technology and communications grew 8.2 percent. Finance and insurance grew 8 percent, the statistics office said.

In agriculture, coconut output grew 28.3 percent, rubber 4.7 percent. A drop in maize contracted cereal output 3.3 percent.

In industry apparel and leather grew 6.2 percent. The statistics office said construction was up 2.4 percent. But mining and quarrying was down 0.5 percent, wood products was down 24.4 percent, metal products were down 4.8 percent.

Sewerage and waste was up 10.9 percent, water collection and supply was up 7.3 percent. (Colombo/Sept18/2019)


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Sri Lanka to introduce social security system: minister

ECONOMYNEXT – Sri Lanka’s Labour minister has said that they are set to introduce a comprehensive national social security system, covering all workers.

“The system will address the weaknesses of the current system and provide much-needed support to workers and their families,” Manusha Nanayakkara, Minister of Labour and Foreign Employment said on X (formerly known as Twitter).
He did not specify the details.

Nanayakkara also spoke of the need for robust social security when he met with exporters last week to discuss labor law reforms, boosting female workforce participation and attracting FDI.

Sri Lanka plans to reform labour laws for an export-oriented economy.

The pandemic and the economic crisis highlighted the need to improve the coverage of social security.

Studies have shown that Sri Lanka’s women are kept out of formal employment by childcare, elderly care and housework, as day care and elderly homes are either too expensive or too few.

The government imposed a Social Security Contribution Levy to increase its revenue last year. (Colombo/Sep27/2023)

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Sri Lanka’s stocks up in trading on Wednesday morning

ECONOMYNEXT – Sri Lanka shares were picking up in trading on Wednesday morning.

Turnover was at 50 million. Trading in the Capital Goods Industry Group was driving turnover.

The All Share Price Index was up 0.37 percent or 41.78 points to 11,289.94, while the S&P SL20 was also up 0.68 percent or 21.66 points to 3,187.65.

Hatton National Bank, Commercial Bank and LOLC saw gains in morning trade, while Tokyo cement and Lanka Hospitals were trading down during morning trading. (Colombo/Sep27/2023)

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Sri Lanka rupee opens at 323.50/324.10 to the US dollar, bond yields stable

ECONOMYNEXT – Sri Lanka’s rupee opened at 323.50/324.10 to the US dollar on Wednesday, after closing on Tuesday at 323.70/324.20 to the US dollar, dealers said.

A bond maturing on 01.08.2026 was quoted at 15.50/70 percent on Wednesday up from Tuesday’s close at 15.45/65 percent.

A bond maturing on 01.05.2028 was quoted at 14.50/55 percent from closing at Tuesday at 14.30/55 percent. (Colombo/Sep27/2023)

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