Sri Lanka’s economy shrinks 11.8 percent in 3Q 2022

(LANKAPUVATH | COLOMBO) – The economic output of Sri Lanka as measured by Gross Domestic Product (GDP) for the third quarter (Q3) of 2022 recorded as 11.8 percent of negative growth percent year-on-year, the data released by the Census and Statistics Department Thursday showed.

The Department of Census and Statistics (DCS) Sri Lanka, has released the estimated Gross Domestic Product (GDP) at current price and at constant (2015) price in Production approach and the other macroeconomic indicators for the third quarter (July 01st to September 30th) of 2022.

The Gross Domestic Product for Sri Lanka for the third quarter of 2022 at constant price (2015) has declined up to Rs. 2,884,018 million from Rs. 3,269,510 million recorded in the third quarter of 2021.

In addition, the Gross Domestic Product for the 3Q 2022 at current price has increased up to Rs. 6,417,031 million from Rs. 4,418,108 million which recorded in the same quarter in 2021 registering 45.2 percent of positive change in the current price GDP.

This expansion of the GDP at current prices clearly indicates the influence of the high inflation prevailed throughout this quarter, the Department of Census and Statistics reported.

The three major economic activities of the economy; ‘Agriculture’, ‘Industry’ and ‘Services’ have contributed their share to the GDP at current prices by 8.7 percent, 34.5 percent and 54.1 percent respectively, while ‘Taxes less subsidies on products’ component has contributed 2.7 percent of share to the GDP in the third quarter of year 2022.

During this quarter, all three major economic activities; Agricultural, Industrial and Services activities have recorded negative growth rates of 8.7 percent, 21.2 percent and 2.6 percent respectively.

While the influence of the Covid-19 pandemic was comparatively low on the quarter under review in this year, several other factors were highly affected for the functioning of the economy of the country, the Department said.

“The factors such as high inflation, energy crisis prevailed during the early stages of this quarter, high interest rates, shortage of inputs required for the manufacturing activities, high prices of inputs, shortage of cement, high prices of construction materials, problems associated with fertilizer usage and agrochemical sectors, increase of the transport cost, difficulties in distributing goods, decrease in the demand of essential and non-essential goods and services due to the reduction of the real income of the people have directed the economy towards this decline,” the DCS said in its report.

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