Sri Lanka’s economic growth suffers, contracts by 16% in 2ndQ
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File picture of a deserted street in Colombo during a lockdown.
Sri Lanka’s Gross Domestic Product (GDP) growth for the second quarter 2020 contracted substantially by 16.3 per cent, according to official data released this week, due to COVID-19 disruption of the economy – its largest ever drop in history -, but bounced back in the third quarter to record 1.5 per cent growth.
The data released by the Census and Statistics Department (DCS) was delayed for several months due to the disruption of work owing to the pandemic and resulted in data from both quarters being released this week.
The DCS said in a statement that the second quarter GDP estimates, showed an unprecedented fall in real GDP by 16.3 per cent compared to the 1.1 per cent of growth rate recorded in the second quarter of 2019. In this quarter, a majority of the economies in the whole world (eg: India, Maldives, Thailand, Singapore, Malaysia etc), except very few (eg: China, Vietnam), recorded severe contraction in their economies.
The lockdown period affected adversely every economic sector of the country and recorded negative growth rates in their economic activities, specially, manufacturing, construction, passenger transport (land and air), mining and quarrying, tourism, other personal services, professional services, retail trade and some activities of agriculture like marine fishing.
In the second quarter, the Sri Lanka economy, except very few economic sectors, was severely affected due to COVID-19. “Therefore, the DCS required to observe carefully the behaviour of each and every economic sector of the economy during this pandemic before quantifying this impact in the GDP compilation process. Accordingly, the DCS suddenly took necessary initiatives to address this issue. The DCS planned a very quick survey to assess the impact of COVID-19 on the country’s economy. This enterprise sector level survey was conducted during the period of mid of June until the end of July and collected information on economic performance for the period of January to May in the years of 2019 and 2020 from the business firms. The sample consisted of 18,000 enterprises covering large, medium, small and micro level businesses in industry and services sector of the country,” the DCS statement said.
It said that in the third quarter, the country experienced the normalization of business activities and return to new-normalcy in day-to-day life style of the people, after the first wave of the COVID-19 pandemic. This favourable condition helped economic activities resulting in 1.5 per cent positive growth rate in the economy for the first time this year.