Economic growth slumps to 2.9% in 3Q

Sri Lanka’s economy was estimated to have grown 2.9 percent in the third quarter of this year (3Q18) following the expansion of all three major activities of the economy—agriculture, industry and services, according to the Census and Statistics Department.

However, this was slower than the 3.2 percent growth rate recorded for the third quarter of last year, 3.6 percent growth rate (revised from 3.7 percent) recorded for the second quarter of this year and 3.2 percent recorded for the first quarter.

The growth for the nine-month period was estimated at 3.3 percent. Sri Lanka’s economy grew 3.3 percent (revised from 3.1 percent) in 2017.
During 3Q18, agricultural activities, which accounted for 7.5 percent of gross domestic product (GDP) at current prices, expanded 3.3 percent compared to a contraction of 3 percent reported for the same period last year.

The industrial activities, which contributed 27.4 percent to GDP at current prices, recorded a positive growth of 1.9 percent. 

The services activities, which gave the highest contribution of 56.8 percent to GDP, expanded 3.9 percent compared to 2017.

Among the sub activities of agriculture, ‘ growing of rice’, which recorded a 32.8 percent negative growth rate in the third quarter of year 2017, has reported a striking positive growth rate of 46.9 percent during the quarter under review.

The sub activities of ‘fresh water fishing’ and ‘ growing of tea’ have recorded a substantial decline by 19.1 percent and 14.9 percent, respectively in this quarter.

Under industrial activities, ‘manufacture of textile and wearing apparels’ recorded positive growth rates of 3.7 percent and 3.2 percent, respectively during 3Q18.

In addition, ‘manufacture of coke and refined petroleum products’ and ‘manufacture of other non-metallic mineral products’ reported significant positive growth rates of 16.7 percent and 3.9 percent, respectively.

The ‘construction’ activity, which corresponds to the second highest share of 7.0 percent within the industry sector, grew by 2.5 percent during the quarter under review when compared to the third quarter of 2017.

The performance of the service activities were strengthened by sub activities of ‘telecommunication services’, ‘financial services’, ‘insurance services’, ‘information technology services’, ‘human health activities’, ‘accommodation, food and beverage services’, ‘wholesale and retail trade’ and ‘other personal services’.

The telecommunication services activities expanded by 14.8 percent while financial services activities expanded 12.4 percent compared to the third quarter of 2017.

However, ‘programming and broadcasting’ and ‘transportation’ activities contracted substantially by 9.0 percent and 0.7 percent during the quarter under review, compared to the respective quarter in 2017.