Economy grows 2.7% in third quarter

Sri Lanka’s economy grew 2.7 percent in the third quarter of 2019, partially recovering from the Easter Sunday attacks, driven by notable expansions in industry and services activities, although the tourism industry struggled to achieve significant recovery. 

In the corresponding quarter of last year, the country’s GDP grew by 3.5 percent. The country’s gross domestic product (GDP) growth slowed down to a five-year low of 1.6 percent in the second quarter due to adverse impacts of Easter Sunday attacks, after recording a growth rate of 3.7 percent in the first quarter.

Sri Lanka’s economic growth is projected to slowdown to an 18-year low with both International Monetary Fund (IMF) and the World Bank (WB) forecasting a 2.7 percent economic growth for the year.  

During the third quarter of 2019, industry and services sectors grew 3.3 percent and 2.8 percent respectively, while agriculture activities recorded a marginal growth of 0.4 percent. 
Releasing National Accounts Estimates for 2019 third quarter, the Department of Census and Statistics (DCS) stated that the GDP for Sri Lanka for the third quarter of 2019 at current price and constant (2010) price have reached up to Rs.4,027,051 million and Rs.2,507,363 million respectively, against the current and constant (2010) prices of GDP reported for the third quarter of 2018, which was recorded as Rs.3,692,822 million and Rs.2,441,796 million respectively. However, accommodation, food and beverage serving activities fell substantially by 7.5 percent during this quarter when compared to the third quarter of 2018, reflecting the continuous adverse impact from the Easter Sunday attacks on the tourism industry.

During the second quarter, accommodation, food and beverage service activities fell by 9.9 percent in the immediate aftermath of Easter Sunday attacks. 

The four major components of the economy—agriculture, industry, services and taxes less subsidies on products have contributed their share to the GDP at current prices by 6.9 percent, 26.8 percent, 60 percent, and 6.2 percent respectively in the third quarter of 2019.

Tea, fresh water fishing, growing of cereals reported outstanding growth during the quarter while growing of rubber, rice and marine fishing reported substantial contractions.

Overall, industrial activities expanded during the third quarter with higher contribution from beverage, tobacco, apparel non-metallic minerals and chemical products. The construction industry, which contributed 6.7 percent to GDP, grew at 4.6 percent.

Services sector, which makes a higher contribution to the GDP, was boosted by increased activities in retail trade, transportation, telecommunication and financial services.

IT programming, consultancy and related services, even though its share to the GDP is low at 0.2 percent, reported a double digit growth rate of 20.5 percent during the third quarter when compared to the same quarter of last year.
Telecommunication sector grew significantly by 11.1 percent.