Lanka records negative economic growth of 1.5% in 3rd quarter

Sri Lanka has recorded 1.5 percent of negative economic growth rate for the third quarter of 2021, reflecting the impact of the global coronavirus pandemic, the Department of Census and Statistics (DCS) said last week releasing the GDP Summary Indicators for the quarter from July 1 to Sept 30.

During the quarter, the third wave of the Covid-19 pandemic, which began in late April 2021, had intensified and peaked by August and the quarantine curfew imposed throughout the island from the midnight of August 20, 2021 to control the spread of the pandemic was extended from time to time lasting for 41 days until Oct 1, the DCS said.

Although the government allowed agricultural activities, many manufacturing industries, construction and selected services to continue even during the quarantine curfew period, economic activities were hampered by the pandemic and the quarantine curfew.

The Department in its report noted that the Gross Domestic Product at constant prices (2010) has decreased to Rs.2,497,489 Mn by the third quarter of 2021 from Rs.2,536,490 Mn reported in the third quarter of 2020.

The three main components of the economy, “Agriculture”, “Industry” and “Services”, contributed to the Gross Domestic Product at current price by 8.7 percent, 29.9 percent, and 57.4 percent respectively, meanwhile the “taxes less subsidies on products” contributed 4.1 percent in the third quarter of 2021.

In the third quarter of 2021, the overall Agricultural activities recorded a slight positive growth of 1.7 percent in the third quarter of 2021, compared to the higher growth of 3.1 percent recorded in the same quarter of 2020. This was positively affected by the fact that the government had allowed agricultural activities to continue throughout the country even under the quarantine curfew.

Overall Industrial activities recorded a negative growth of 2.1 percent in the third quarter of 2021. This negative growth was mainly due to the contractions recorded in some Manufacturing activities, Construction and Mining & quarrying industries, the DCS said.

Overall service sector slumped by 1.6 percent in the third quarter of 2021. This slowdown in the services sector was mainly due to the disruption in in “Transportation of goods & passenger service activities” and “other personal services activities” which are equally contributed (9.5 percent) to the Gross Domestic Product.