Sri Lanka economy contracted by 8.4 per cent in Q2 2022

Sri Lankan economy has contracted by 8.4 per cent in Q2 2022, according to Weekly Economic Indicators of the Central Bank.

“This was mainly due to the contractions of 10.0 per cent in Industry activities, 2.2 per cent in Services activities and 8.4 per cent in Agriculture activities,” the report said.

“Meanwhile, Taxes less Subsidies on Products recorded a 35.1 per cent decline. Purchasing Managers’ Indices for both Manufacturing and Services activities increased in August 2022, on a month-on-month basis, recording 49.6 and 51.7 index values, respectively.”

“During the period under review (10.09.2022 to 16.09.2022), crude oil prices showed a mixed performance. At the beginning of the period, prices increased due to tight supply ahead of the winter heating season. However, oil prices declined towards the end of the period with expectations for a weaker global demand and continued strengthening of US dollar ahead of potential large interest rate hike. Overall, during the period under review, Brent and WTI prices decreased by US dollars 0.42 per barrel and US dollars 0.19 per barrel, respectively.”

“Weekly AWPR for the week ending 16th September 2022 decreased by 76 bps to 25.51 per cent compared to the previous week.”

“The reserve money increased compared to the previous week mainly due to increase in the deposits held by the commercial banks with the Central Bank.”

“The total outstanding market liquidity was a deficit of Rs. 556.58 bn by end of this week, compared to a deficit of Rs. 565.40 bn by the end of last week.”

“During the six months ending June 2022, government revenue increased to Rs. 918.5 bn compared to Rs. 714.5 bn recorded in the corresponding period of 2021.”

“During the six months ending June 2022, overall budget deficit increased to Rs. 902.7 bn compared to Rs. 780.2 bn recorded in the corresponding period of 2021.”

“During the period from January to June 2022, total expenditure and net lending increased to Rs. 1,822.1 bn compared to Rs.1,495.5 bn recorded in the corresponding period of 2021 ,” the report said.