Sri Lanka’s economy contracts 16.3% in 2nd quarter recording largest ever GDP drop, but recovers in 3Q
Sri Lanka’s Gross Domestic Product (GDP) recorded its largest –ever drop in the country’s history after the economy contracted by 16.3 percent in the second quarter of 2020.
However, Sri Lanka’s economy recorded a positive growth of 1.5 percent when compared to the 2.4% positive growth recorded in 2019 in the 3rd quarter.
Sri Lanka initially recorded a negative 1.6 percent fall in the first quarter.
The figures come after the Ministry of Finance released the 2nd and 3rd quarter GDP rates yesterday (15) after months of delay.
The Department of Census and Statistics said the second quarter recorded a large drop due to several districts of the country being placed under lockdown due to the coronavirus pandemic, resulting in severely impacting many economic sectors.
The Department pointed out that the two main districts of Colombo and Gampaha, where the major industrial zones and business places are situated, were under the imposed curfew until 26 May.
#SriLanka first nine months GDP 2020 contracted by 5.3%, with a steep decline in Q2 of 16.3% as curfew hit, followed by an uptick of 1.5% in Q3 as lockdowns were lifted. Statistics Dept also revised down v slightly the Q1 GDP to -1.7% (from -1.6% earlier). https://t.co/NYKuCAdfI5 pic.twitter.com/fHNWsYweP3— Anush Wijesinha (@anushwij) December 16, 2020
The country experienced the normalization of business activities and return to new-normality in day to day life throughout the third quarter in the year 2020.
This favorable condition enabled economic activities to perform well, especially in the third quarter (July 1st to September 30), and have resulted in recording 1.5 percent of positive growth rate in the economy for the first time for the year 2020.
The Department of Census and Statistics said the Gross Domestic Product for Sri Lanka for the second quarter of 2020 at constant price has declined up to Rs. 1,936,273 million in comparison to Rs. 2,312,078 million recorded in the second quarter of 2019.
In addition, the Gross Domestic Product for Sri Lanka for the second quarter of 2020 at current price has decreased up to Rs. 3,012,013 million in comparison to Rs. 3,589,246 million recorded in the second quarter of 2019, registering 16.1percent of negative change in the current price GDP value.
The Department added the four major components of the economy; ‘Agriculture’, ‘Industry’, ‘Services’ and ‘Taxes less subsidies on products’ have contributed their share to the GDP at current prices by 9.7 percent, 24.8 percent, 61.2 percent and 4.3 percent respectively in the second quarter of 2020.