Economic growth in 2017 fell to 16 year-low

Sri Lanka’s economy grew by only 3.1 per cent last year, the lowest in 16 years with the fall blamed mostly on adverse weather conditions, according to the Central Bank (CB).

Though this data was contained in the CB's annual report for 2017 released to the public on Thursday, CB officials have indicated in the past few months that economic (GDP) growth was expected to fall to 3 per cent from 4.5 per cent in 2016.

The worst year before this was in 2001 when the econ- omy contracted and recorded negative growth of 1.4 per cent after being hit by a series of global and domestic economic issues.

The CB said the growth rate was significantly below projections of the Sri Lankan authorities as well as international agencies. “In spite of the low real GDP growth, the economy created sufficient employment opportunities that induced a further reduction in the unemployment rate to 4.2 per cent during the year. In terms of expenditure, growth was supported by the expansion of both consumption and investment expenditure in 2017, while net external demand continued to weigh on growth negatively. Both services and industry related activities, which together account for 92.4 per cent of gross value added, recorded growth rates of below 4 per cent. The agriculture related activities recorded a negative growth for the second consecutive year, although estimates for 4th quarter 2017 indicated a recovery in the sector,” it said.