ECONOMYNEXT- Sri Lanka’s gross domestic product (GDP) grew 2.7 percent in the third quarter of 2019 from a year earlier, data from the state statistics office showed, as Easter Sunday bombings added to the after effects of a currency collapse.
Sri Lanka economic growth in the second quarter was revised to 1.5 percent, from 1.6 percent in the second quarter of 2019.
In the third quarter of 2018 the economy grew 3.5 percent, as the country was recovering from the effects of a 2016 currency collapse, and another run was triggered on the rupee with liquidity injections.
The currency collapse led to a credit contraction, bad loans and a slowdown in domestic demand when Easter Sunday bombings hit tourism.
Inflation measured by the implicit price deflator picked up to 6.2 percent in the third quarter, from 2.12 percent in the second quarter as the altered price structure after the currency collapse took effect.
Amid tight liquidity, the GDP deflator was only 0.6 percent in the first quarter.
“National accounts estimates of the third quarter 2019 still reflect the impact of ‘Easter Sunday Attack’ hit on April 21st, 2019, specially in some service sector related economic activities,” the Census and Statistics Department said.
The accommodation, food and beverage service activities ‘contracted substantially’ during the quarter, due to the hit on the tourism industry, the department said.
The services sector grew 2.9 percent in the third quarter compared to 4.3 percent a year earlier, while contributing 60 percent to GDP.
Services growth came mainly from wholesale and retail trade, transportation, telecommunication and financial services.
IT programming, consultancy and related services, although making up just 0.2 percent of GDP, grew at 20.5 percent in the quarter.
Accommodation, food and beverage services fell 7.5 percent due to the Easter attacks.
Industries, which contributes 26.8 percent to GDP, grew at 3.3 percent from 3.1 percent a year earlier, with higher food and beverage, tobacco, apparel non-metallic minerals and chemical products.
The construction industry, which contributed 6.7 percent to GDP, grew at 4.6 percent.
Some industrial activity like paper production, basic and fabricated metal manufacturing, and furniture making saw declines.
The agriculture sector grew 0.4 percent in the third quarter compared to a 4 percent growth a year earlier, and contributed 6.9 percent to GDP.
The sector grew on the back of fresh-water fishing, growing of coconuts, tea, cereals, fruits and vegetables and other perennial crops, and forestry and logging.
Rubber growing, marine fishing, animal production, rice and plant propagation saw declines.
For the nine months to September, Sri Lanka’s GDP grew 2.6 percent. (Colombo/Dec18/2019)