GDP grows 2.6% in 2Q amid flood impact

Sri Lanka’s Gross Domestic Product (GDP) grew 2.6 percent from a year earlier in the second quarter of this year, decelerating from 5.5 percent reported in the first quarter, as the heavy floods during the period took its toll on the country’s agricultural and industry sectors.

“Sri Lanka experienced inclement weather conditions during second quarter of 2016. It may have caused an impact on the economy,” the country’s statistics office, the Census and Statistics Department said. The agricultural sector contracted of 5.6 percent while industry sector grew only 2.2 percent from a year ago. The services sector rose 4.9 percent. 

“Agriculture activities were affected badly due to the dry weather condition prevailed from October 2015 to May 2016 and high rain falls experienced in upcountry and wet zone areas. 
High rain falls experienced in the Western province and the areas in and around free trade zones of the Western province may have affected considerably over industrial activities,” the statistics office said. 

The GDP for the second quarter at constant (2010) price reportedly reached up to Rs.2, 130, 240 million. The four major pillars of the economy— agriculture, industry, services and taxes less subsidies on products—have contributed their share to the GDP at current price by 7.7 percent, 26.6 percent, 55.8 percent and 9.8 percent, respectively, in the second quarter of 2016.
Among the sub activities of agriculture, the value added of ‘growing of rice’, ‘growing of tea’, ‘growing of rubber’ and ‘marine fishing’ declined by 17.9 percent, 12.2 percent, 8.2 percent and 7.8 percent, respectively, during this quarter, compared to the same quarter in the previous year. 

Among the industrial activities, the ‘construction’ activity, which corresponds to the highest share, rose 6.9 percent during this quarter to the second quarter of 2015.
Activities of ‘manufacture of food, beverages and tobacco’ and ‘manufacture of textile and wearing apparel’ which contribute considerably to industrial activities, experienced growth in each activity by 0.4 percent and 0.9 percent respectively during the second quarter of 2016, when compared to the same quarter in the previous year.
Mining and quarrying activity have reported a 4.9 percent of positive growth rate, over the period considered.

In addition, the sub activities of ‘electricity, gas, steam and air conditioning supply’ and ‘manufacture of furniture’ have shown a considerable growth rates of 7.0 percent, 4.4 percent, respectively.
The performance of services sector was underpinned specially by the sub activities of ‘telecommunication’, ‘financial service activities’, ‘insurance activities’, ‘education service’ and ‘wholesale and retail trade’ which reported significantly higher growth rate of 21.2 percent, 14.5 percent, 15.1 percent, 10.5 percent and 3.5 percent, respectively, compared to the respective quarter in the year 2015.