Official data released on Friday (Dec.15) reveals that Sri Lanka’s economy expanded by 1.6% in the third quarter (Q3) of 2023. The Department of Census and Statistics (DCS) reported that the Gross Domestic Product (GDP) at constant prices rose to Rs. 2,946.1 billion in Q3 2023, marking an increase from Rs. 2,900.6 billion in the same period in 2022.
The DCS stated, “The year-on-year GDP growth rate for the third quarter of the year 2023 has been reported as a positive growth rate of 1.6%.”
Additionally, the GDP for Q3 2023 at current prices increased to Rs. 6,906.8 billion from Rs. 6,586.6 billion in the corresponding quarter of 2022, reflecting a 4.9% positive change in the current price GDP.
Key contributors to the GDP at current prices during this period were the ‘agricultural’ (7.8%), ‘industrial’ (28.1%), and ‘services’ (57.5%) sectors. The agriculture sector experienced a 3% growth year-on-year, while industrial output saw a 0.3% increase, and the services sector recorded a 1.3% growth between July 01 and September 31.
The DCS highlighted that the positive momentum in Q3 2023 was influenced by favorable changes in foreign exchange uncertainties, resulting in a positive state for the economy. Input costs declined in tandem with the exchange rate improvement, and the demand for debts, at a lower level, showed positive indications in this quarter alongside a reduction in interest rates.
The tourism sector’s expansion contributed positively to service exports, particularly in accommodation, food and beverage service activities. Agricultural activities also registered positive growth in Q3 2023, along with certain manufacturing industries that expanded during this period.
This economic expansion marks the first since the end of 2021, driven by a lower base, moderating inflation, a strengthening currency, and lower interest rates. Sri Lanka’s economy received a USD 2.9 billion IMF bailout in March, unlocking a second tranche of USD 337 million, though the IMF has cautioned that challenges persist.
Despite an expected contraction of 3.6% in 2023, the IMF projects a return to positive growth in 2024 at 1.8%. However, the nation faces formidable reforms, including higher taxes, restructuring of loss-making state enterprises, and a comprehensive overhaul of its foreign debt.
Source – adaderana.lk
