Sri Lanka GDP grows 4.3-pct in 2021 first quarter

Sri Lanka’s gross domestic product grew 4.3 percent in the first quarter of 2021 recovering from a contraction of 1.8 percent in 2020, the state statistics office said.

Agriculture grew 6.1 percent, industry grew 5.5 percent and services 3.0 percent.

The economy was hit to “some extent” due to second wave which started in October 2020, but most activities had normalized except for areas like tourism and entertainment.

Nominal GDP with inflation grew 8.6 percent to 4,173 billion rupees from 3,844 billion. The GDP deflator, a broad measure of inflation was 4.1 percent.

In agriculture, which recovered from a negative 6.5 percent to an expansion of 6.1 percent, tea was up37.9 percent, cereals 34.8 percent, fresh water fishing 27 percent, rubber 16 percent, vegetables 14.5 percent, coconut 6.4 percent and marine fishing was up 16 percent.

In industry, manufacturing was up 6.8 percent, chemicals and pharma was up 20 percent, rubber and plastic 12.9 percent, textile and apparel 8.4 percent, food and tobacco 6.0 percent and machinersy 8.1 percent.

Construction grew 4.3 percent.

In Services, telecom grew 19.1 percent, IT 14.9 percent, finance 13.1 percent and insurance 11.4 percent.

Wholesale and retail trade grew 3.7 percent and transport 1 percent.

Accommodation and food services were down 31.9 percent from a year earlier.

Sri Lanka’s credit system has been hit by monetary instability amid record money printing and economic controls are expanding.

There are sweeping import controls, price controls and rationing has come in import letter of credit.

In the wake of money printing authorities are blaming the usual suspects: hoarders and speculators.

Meanwhile rent-seeking import substitution businesses are selling goods at officially sanctioned ‘black markets style prices under cover of import controls.