Economy grows at 3.2% in 1Q18

• Economy grew 3.3% in first quarter of 2017
• Agricultural sector records positive growth 
• DCS revises 2017 full-year growth to 3.3%

Sri Lanka’s economic growth in the first quarter of 2018 (1Q18) has been estimated at 3.2 percent, against the 3.3 percent growth recorded for the same period last year, the Department of Census and Statistic (DCS) said, yesterday. 

Gross domestic product (GDP) at constant (2010) prices for 1Q18 was recorded as Rs.2,223,856 million and GDP reported for the first quarter of 2017 was Rs.2,154,971 million.

The four major components of the economy—agriculture, industry, services and taxes less subsidies on products—have contributed their shares to GDP at current prices by 7.0 percent, 30.4 percent, 53.6 percent and 8.9 percent, respectively for the first quarter of 2018.

In this quarter, the agricultural activities have expanded by 4.8 percent, while in the first quarter of 2017, they recorded a 4.4 percent contraction. 

The agriculture sector, which recorded negative growth rates consecutively over several quarters, due to unfavourable weather conditions, seems to have recovered and has recorded positive growth rates since the fourth quarter of 2017. 

The industrial activities have expanded marginally, recording a 1.0 percent growth rate during the period under review. 

The service activities have further expanded by 4.4 percent in the first quarter of 2018, compared to the same quarter 
in 2017.

Meanwhile, the DCS has revised the growth rates of the last two quarters of 2017 and has revised the full-year growth rate figure upwards to 3.3 percent, from the earlier 3.1 percent, which was the lowest growth rate recorded in 16 years. 

“Based on the actual data received, the DCS has revised the third and fourth quarters of 2017 and the annual 2017 growth rates as 3.2 percent, 3.5 percent and 3.3 percent, respectively,” the DCS said.

Among the sub activities of agriculture, ‘Growing of rice’ has recorded 56.6 percent growth rate and a 49.6 percent contraction was recorded in the first quarter of 2017. 

‘Growing of cereals’ (except rice), ‘Growing of vegetables’, ‘Growing of tea’, ‘Growing of fruits’, ‘Animal production’, ‘Forestry and logging’ and ‘Fresh water fishing and fresh water aquaculture’ have reported high growth rates of 40.2 percent, 22.3 percent, 10.6 percent, 6.0 percent, 5.4 percent, 3.2 percent and 37.4 percent, respectively. 

In the meantime, the substantial negative growth of 13.5 percent was reported for ‘Growing of oleaginous fruits’ (including coconut) due to the continuous drought prevailed throughout the coconut growing areas during last year. 

The ‘Growing of rubber’ and ‘Marine fishing and marine aquaculture’ have also been contracted by 13.9 percent and 2.0 percent, respectively in this quarter.
In 1Q18, the overall industry activities expanded by 1.0 percent. 

The manufacturing sector alone has expanded by 2.8 percent during this period, which was largely contributed by the growth of sub activities of ‘Manufacture of food, beverages and tobacco’, ‘Manufacture of textile and wearing apparels and leather-related products’, Manufacture of wood and wood products’, ‘Manufacture of chemical products and basic pharmaceutical products’, Manufacture of rubber and plastic products’ and ‘Manufacture of basic metals and fabricated metal products’. 
These activities have reported positive growth rates of 5.2 percent, 4.7 percent, 11.9 percent, 6.1 percent, 7.9 percent and 9.1 percent, respectively. However, ‘Construction’ activity has contracted by 4.9 percent in this quarter, compared to the first quarter of 2017. 

The sub activity of ‘Electricity gas, steam and air conditioning supply’ reported a significant growth of 10.2 percent in the first quarter of 2018, compared to the growth rate of 0.9 percent recorded in the first quarter of 2017.

The service activities, which contribute the highest share of 53.6 percent to the overall GDP, grew by 4.4 percent during the first quarter of 2018, compared to the same quarter in the year 20 I7. 

This performance was largely due to the expansion of sub activities of ‘Wholesale and retail trade’, ‘Accommodation, food and beverage services’,

‘Telecommunication’, ‘Financial services activities and auxiliary financial services’, ‘Real estate activities including ownership of dwellings’, ‘Professional services’ and ‘Other personal service activities’. 

These activities recorded significant growth rates of 5.4 percent, 7.6 percent, 11.1 percent and 12.2 percent, 4.9 percent, 3.9 percent and 5.0 percent, respectively. 
‘Public administration and defence; compulsory social security’ and ‘Education services’ reported contractions by 0.4 percent and 1.7 percent, respectively.