Sri Lanka unemployment rises past 5-pct to 4-yr high in 3Q19 amid slow growth
ECONOMYNEXT- Sri Lanka’s unemployment continued to rise, reaching 5.1 percent amid a slowdown in growth in the September quarter of 2019, data from the statistics office showed.
Unemployment grew from 4.9 percent at end-June and 4.1 percent from a year earlier. Since the start of 2019, unemployment has risen from 4.6 percent.
September saw the highest unemployment rate, matching the levels seen exactly six years ago in the third quarter of 2015.
Sri Lanka’s growth has slowed down in 2019 following a bust in the soft-pegged rupee in 2018 which led to a lengthy period of liquidity shortages and a fall in credit and rising bad loans.
The 2018 constitutional crisis and the Easter Sunday bombings had also helped mute growth by undermining confidence in the economy and hitting the tourism setor.
Sri Lanka’s growth in the September quarter was 2.7 percent, and 2019 is projected to have ended with 2.8 percent growth.
The number of employed in the September 2019 quarter was 8.16 million persons, down from 8.2 million persons in June, but up from 8.04 million a year earlier.
Employment in agriculture grew to 2.06 million in September, comprising of 25.3 percent of the employed, from 1.99 million three months earlier and 2.03 million a year earlier.
Agriculture sector growth had fallen to 0.4 percent in the third quarter from a year earlier, with a moderation of rice production in the Yala season, while contributing to 6.9 percent of the gross domestic product (GDP)
Industrial sector employment was 2.21 million persons or 27 percent of the total, down from 2.32 million persons in the previous quarter, and 2.31 million in 2018.
This was despite a 2.5 percent growth in the industrial sector making up 26.8 percent of GDP, with the main activities, food production and garment manufacturing growth at over 5 percent and construction at 4.6 percent.
In the services sector, 3.89 million persons were employed, making up 47.7 percent of the total, and recorded a marginal fall from June, but was up from 3.70 million a year earlier.
The service sector had posted a 2.8 percent growth during the September quarter, contributing 60 percent to GDP, with rising value addition to the economy from financial services making up for the shortfall in tourism.
Totally, 8.59 million persons were economically active in the September quarter, down from 8.62 million three months earlier but up from 8.39 million a year earlier.
The labour force participation rate among women had fallen to 34.1 percent from 34.6 percent in June, but recording a marginal growth from 34 percent in 2018.
Unemployment was high among women in the age groups of 15-24 and 25-29 many of whom have passed the GCE Advance Level exams, while among men, the jobless were in the 15-24 age group. (Colombo/Jan07/2019)
Economic Intelligence Unit of the Ceylon Chamber of Commerce
Jehan Perera - Executive Director National Peace Council