- IIP drops to 107.3 index points in Nov. 2018, from 108.6 in Nov. 2017
- Statistics office offers no reasons for sharp Oct.-Nov. fall
Sri Lanka’s industrial production slowed in November as the activities or the sub-sectors, which recorded a growth, trailed the ones that contracted over the same month in 2017.
The Index of Industrial Production (IIP) recorded a 108.6 index points in November 2017, compared to 107.3 in November 2018 and 111.0 in October.
The IIP is a measure of the overall health of the industrial production in the manufacturing sector and is measured and published by the Census and Statistics Department of Sri Lanka.
The statistics office did not offer any reasons to the sharp fall between October and November, although the businesses turned to a more wait-and-see approach after the political turmoil gripped the nation and the economy becoming its greatest casualty.
The investors fled the country and all three major global rating agencies downgraded Sri Lanka’s sovereign rating due to the heightened refinancing risks amid no checks and balances of the government spending as the presentation of the budget slated in November was delayed indefinitely.
According to the IIP data for November, the production of food products, tobacco products, wood and wood-related products, paper and paper-related products and printing and reproduction of recorded media, reported contractions, against the same month in 2017.
Amongst the other sectors that recorded negative performance were chemicals and chemical-related products, pharmaceutical and pharmaceutical preparations, other non-metallic mineral products and manufacture of electrical equipment, machinery and furniture.
Meanwhile, the beverage production activity improved significantly while manufacturing of textiles and wearing apparels, leather and related products, coke and refined petroleum products recorded improvements over the same period last year.
Further, rubber and plastic products, manufacture of rubber and plastic products, basic metals and fabricated metal products, picked up from a year earlier.
Sri Lanka’s business and investment confidence remain low amid tight policy and they wait direction from the policymakers.
Further, Sri Lanka lacks robust industrial policy and the country missed out on the opportunity to become an industrial powerhouse in 1980s and 1980s, during which the East Asian miracle happened, as the country was mired in bad governance triggering racial violence, which led to a three-decade-old war.
Economists say ever since Sri Lanka keeps on missing buses, in a reference to its missing economic opportunities.
Sri Lanka is a US $ 92 billion economy but during the last couple of years, the growth slowed down to below 4.0 percent, due to a mix of policy errors, debt hangover and bad politics.