Economy Yet To Fully Recover Despite Growth In 2Q.
Posted 16,September

By Chaveendra Dunuwille

In Local News

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Information released by the Department of Census and Statistics showed that the local economy experienced a 12.3% growth in the 2nd quarter of 2021. The change in 2Q 2021 follows a 16.4% contraction in the same period the previous year. But, the department also reiterated that this does not mean that the economy has fully recovered.

Following the most significant GDP drop in the history of Sri Lanka in 2Q 2020, the current price of the GDP has risen by 20.6% from LKR 3 trillion to LKR 3.6 trillion. According to the CDS, the GDP at a constant price rose from LKR 1.9 trillion to LKR 2.17 trillion.

The GDP growth resulted from the improvement in the Agriculture, Industrial and Services sectors. The sectors experienced growths of 8.1%, 22.1% and 7.5%. While the agriculture sector accounted for 9.2% of the GDP in 2Q the industry and services sector accounted for 27% and 57.9%. Taxes less subsidies accounted for 5.8% of the GDP.

In 2Q 2020, the agriculture sector contracted by 8.2%. However, 2Q 2021 saw the sector recover with a growth of 8.1%. This was primarily due to the government allowing the continuation of agricultural activities during the lockdown. 2Q 2021 saw the marine fishing sector grow by 24.7%, while the animal production and tea sectors grew by 18% and 13.4%. However, during this time, the rice and vegetable production sector decreased by 5.1% and 4.5%. The manufacturing process of the industrial sector experienced a growth of 26.5%, with textiles and apparel accounting for 4.4% of the GDP. In contrast, rubber & plastic products
and non -metallic products accounted for 66.8% and 41.3% of the industrial sector’s contribution to the GDP.

While the services sector experienced nominal growth, the DCS points out that the industry did not reach the expected level. Nevertheless, the IT and Program sector grew by 24.2%, while the transportation and real estate sectors grew by 20.4% and 5.5%.