Provincial GDP reflects enormous disparity between regional economies

• Share by each province to nominal GDP ranges from 38 percent by Western Province to 4.8 percent in Northern Province

Sri Lanka’s Provincial Gross Domestic Product (PGDP) out for 2020 reflected starkly divergent living conditions and the economic prospects confronting the people living in different regions in the country as each of their shares to the overall economic output ranged from a high of 38 percent by the Western Province to a tiny 4.8 percent by the Northern Province. 

Meanwhile, the massive economic toll brought about by the pandemic and the poor handling of the economy for generations by nearly all policymakers have further changed their economic fortunes for the worst as a large majority is now scrambling to make their ends meet due to loss of incomes and the sky rocketing prices, with agriculture-heavy regions suffering the most.  

The Western Province, the economic nerve centre of the country, despite its dominance saw its share slipping by 1.0 percent in 2020 to 38.0 percent, pulled down by the weak performance across all three economic sectors. 

For instance, services, which account for the lion’s share of the Western Province economy declined to 39.3 percent from 39.7 percent, while industry and agriculture followed suit each having their shares slipped to 44.6 percent and 8.1 percent from 45.6 percent and 9.6 percent respectively. 

Central and North Western provinces followed with the second and third spots, each with a share of 11.3 percent and 11.0 percent respectively, compared to 11.3 percent and 10.9 percent in 2019. 

PGDP measures each province’s share in the overall nominal GDP, its annual change and to what extent each of the three main economic activities have fared in each province relatively to the previous year. 

But, the PGDP data is among the most lagging as it took almost eight months for the officials to compute them since the overall GDP figures were first made available by around April.

Nevertheless, PGDP provides key insights to policy makers when crafting development policies to bring about balanced growth and wellbeing to its people as the living conditions offer starkly different experiences across the regions at present. 

While the Western Province’s dominance has been declining since recently due to attempts at setting up factories, job creation and other economic opportunities as of late by successive governments in regions, the highly skewed nature of the Western Province reflects an excessive agglomeration of most economic resources in one region at the expense of the rest. 

Poor infrastructure, nascent growth and the limited economic opportunities in the regions have forced many people to leave them behind seeking better life and economic prospects in the Western Province which in itself is creating new set of challenges such as rising congestion, soaring housing property prices and overall decline in quality of life observed in city dwelling which has become a new phenomenon.