Economy grows at 3.7% in 2Q

• Agriculture activities expand 4.5%
• Rubber and tea show substantial declines
• Construction sector growth moderates to 1.4%

Sri Lanka’s economy grew at an estimated 3.7 percent during the second quarter of this year (2Q18) compared to  4 percent growth reported for the same quarter, last year, and the revised growth estimate of 3.5 percent (from 3.2 percent) in the first quarter, helped by expansion in  agriculture activities.

The Department of Census and Statistics said the four major components of the economy—agriculture, industry, services and tax less subsidies on products— have contributed their shares to the GDP at current price by 8.4 percent, 25.6 percent, 57.1 percent and 8.9 percent respectively.

During the quarter under review, agricultural activities expanded favourably by 4.5 percent, compared to the contraction of 3.1 percent reported in the second quarter 
of 2017. 

Industrial activities recorded a slight expansion of 2.3 percent and service activities expanded further by 4.8 percent, compared to the second quarter of last year.
Among the sub activities of agriculture, ‘growing of cereals, ‘growing of rice’, ‘growing of vegetables’ and ‘growing of oleaginous fruits including coconut’ have expanded by 19.2 percent, 59.3 percent, 9.6 percent and 5.4 percent, respectively, recovering the heavy contractions recorded in the second quarter 
of 2017 . 

The sub activities of ‘growing of fruits’, growing of spices’, ‘animal production’, and ‘fresh water fishing have further expanded by 6.9 percent, 3.1 percent, 2.6 percent and 32.8 percent respectively. 

In the meantime, ‘growing of tea and ‘growing of rubber’ reported substantial declines of 7.1 percent and 11.9 percent while a slight contraction of 0.5 percent was recorded for ‘marine fishing.’ 

Industrial activities which share one fourth of the GDP in the second quarter of 2018, expanded by 2.3 percent. 

The manufacturing sector alone has expanded further by 3.2 percent during this period, supported mainly by the sub activities of ‘manufacture of food, beverages and tobacco’, ‘manufacture of textile and wearing apparels’, ‘manufacture of coke and refined petroleum products’, ‘manufacture of basic metals and fabricated metals’ and ‘manufacture of furniture’, which recorded positive growth rates of 5.2 percent, 1.9 percent, 22.4 percent, 6.3 percent and 5.9 percent respectively. 

The ‘construction’ activity, one of the main contributors, to the total GDP, grew moderately by 1.4 percent in this quarter compared to the 6.0 percent growth recorded in the second quarter of 2017.

The sub activity of ‘electricity gas, steam and air’ reported a considerable growth of 2.3 percent in the second quarter of 20 18.

The three fifth of overall GDP is shared by the service economy of the country recorded an expansion of 4.8 percent in the second quarter of 2018, when compared to the same quarter of 2017.

Performance of the service activities were strengthened by the sub activities of ‘wholesale and retail trade’, ‘accommodation, food and beverage services’, ‘telecommunication services’ ‘information technology services’, ‘financial services’ , ‘insurance services’, ‘real estate activities’, and ‘Other personal service’ expanded by 4.9 percent , 6.4 percent, 14.4 percent, 9.0 percent, 12.0 percent, 11 .0 percent, 3.7 percent and 4.8 percent, respectively, compared to the second quarter of 2017 . 
The activity of ‘programming and broadcasting’ contracted substantially by 15.5 percent within this quarter compared to the respective quarter in 2017.