Economy grows at 5.3% in 4Q; 4.4% in 2016

Sri Lanka’s gross domestic product (GDP) grew at 5.3 percent in the fourth quarter of 2016 (4Q16) compared to the same period of the previous year and the economic growth rate for the year 2016 was estimated at 4.4 percent, the country’s statistics office said.

During 4Q16, the agriculture activities have reported a negative growth rate of 8.4 percent, while the industrial activities increased drastically by 9.2 percent. The services activities recorded a positive growth rate of 4.6 percent.

Meanwhile, the four major components of the economy — agriculture, industry, services and taxes less subsidies on products — contributed their share to GDP at current price by 7.5 percent, 27.1 percent, 57.0 percent and 8.4 percent, respectively, for the year 2016.

The highest growth rate of 6.7 percent was reported for overall industrial activities. The services activities grew by 4.2 percent, compared to the previous year. However, the agricultural activities reported 4.2 percent of negative growth rate.

Sri Lanka experienced inclement weather during the year 2016. Particularly, the severe flood experienced in the second quarter of 2016 and the drought prevailed during the year, may have had an impact on the agriculture activities of the country.

According to the Department of Census and Statistics (DCS) the agriculture sector sub activity of ‘growing of rice’ declined drastically by 31 percent during the year 2016, compared to the previous year.

In addition, ‘growing of tea’, ‘growing of rubber’ and ‘growing of cereals’ declined by 11.2 percent, 10.7 percent and 10.5 percent, respectively.

However, ‘freshwater fishing’, ‘spice growing’ and ‘animal production’ have recorded positive growth rates.

The industrial sector activity in 2016 was led by ‘construction’, which rose 14.9 percent. Among the manufacturing activities, specially the ‘manufacture of basic metal and fabricated metal product’, ‘Manufacture of rubber and plastic products’ and ‘manufacture of machinery and equipment’ have grown rapidly during the year 2016 by 28.7 percent, 17.9 percent and 14.1 percent, respectively.

However, ‘manufacture of food, beverages and tobacco’ and ‘manufacture of textile and wearing apparel’ have declined by 2.5 percent and 0.2 percent, respectively.

Meanwhile, according to the DCS, the performance of services sector was underpinned specially by the sub activities of ‘financial service activities’, ‘insurance activities’, ‘telecommunication’, ‘programming and broadcasting activities’, ‘education service’ and ‘IT programming consultancy’, which reported significantly higher growth rates of 12.4 percent, 8.5 percent, 8.3 percent, 7.7 percent, 7.5 percent and 7.1 percent, respectively, compared to the previous year.