’LAST YEAR’S DROUGHT CONTRIBUTED TO SLIDE IN ECONOMIC GROWTH’
Last year’s severe drought contributed to the slow-down of the country’s economy during the first quarter of 2013, the midyear fiscal report issued by the Ministry of Finance and Planning stated.
According to the report which was presented to Parliament last week the economy had recorded a 6.0 percent growth, in real terms, during the first quarter of 2013 in comparison to 8.0 percent growth recorded during the first quarter of 2012, and the 6.3 percent growth recorded during the fourth quarter of 2012.
The Industrial sector which grew by 10.7 percent during the first quarter of 2013 had mainly contributed to the economic growth as per the report. There had been a 0.1 percent sluggish growth in paddy production and 1.2 percent contraction in production of highland crops
However, the Agriculture Sector and the Services Sector that recorded a slower growth of 2.0 percent and 4.3 percent, respectively during the first quarter of 2013 has contributed to the slow growth of overall economy according to the mid-year fiscal report.
Accordingly, the agriculture sector had slowed down due to the failure in 2012/13 ‘Maha’ crop due to severe drought in the second and third quarters of 2012.
There had been a 0.1 percent sluggish growth in paddy production and 1.2 percent contraction in production of highland crops, vegetables and fruit affected by the unfavourable weather conditions. This is in comparison to 36.1 percent and 10.8 percent higher growth recorded during the same period in 2012, respectively.
Industrial sector contribution to GDP expanded by 1.3 percent to 31.3 percent during this period. Better performance in all main sub-sectors supported this growth.
Manufacturing sector which contributed to 17.6 of the GDP, grew by 6.4 percent benefiting from the 6.5 percent growth in factory industries.
This was supported by the noteworthy performance in production of food and beverages, textiles and wearing apparel industries benefiting from the pickup in domestic demand due to increased economic activities, tourism sector revival and also the positive impact from the removal of the ceiling imposed on private sector credit expansion and downward adjustment of interest rates since end 2012.