Sri Lanka’s GDP grows 3.7-pct in 2nd quarter 2018
ECONOMYNEXT – Sri Lanka’s gross domestic product grew 3.7 percent in the second quarter of 2018, accelerating from 3.2 percent in the first quarter with agriculture growing 4.5 percent compared to a contraction a year earlier, as a drought ended the state statistics office said.
Government contracted 0.9 percent in real terms on top of a 4.8 percent contraction in the second quarter of 2017. Salary increases of state workers usually add to gross domestic product.
Sri Lanka saw a credit bubble fired by money printing in 2015 which led to a balance of payments crisis up which was corrected in early 2017, but drip-drip-drip depreciation since then had sapped domestic demand and real wages, critics say.
In the second quarter a minor run on the central bank triggered by a so-called ‘buffer strategy’ term reverse repo liquidity injections kept businesses distracted.
In general a run-down of foreign reserves tend to boost activity and collection of foreign reserves tends to slow credit and activity.
Industry grew 2.3 percent and services grew 4.8 percent.
Rice production grew 59.3 percent, tea contracted 7.1 percent, rubber contracted 1.9 percent and vegetables grew 19.2 percent. Animal production was up 2.6 percent.
Marine fisheries was down 0.5 percent but freshwater aquaculture was up 32.8 percent.
In industry manufacturing grew 3.2 percent. Food beverages and tobacco was up 5.2 percent, petroleum was up 22.4 percent, electricity was up 2.3 percent and rubber and plastics was down 2.7 percent.
Construction grew 1.4 percent.
In services, wholesale and retail trade grew 4.9 percent, slowing from 5.4 percent in the first quarter, hotels were up 6.4 percent, telecommunications was up 14.4 percent.
Information technology and programming was up 9.0 percent, insurance and pensions was up 11 percent.
Sri Lanka’s GDP during the first half of 2018 grew 3.6 percent from a year earlier. (Colombo/Sept20/2018)