28 C

Sri Lanka’s economy contracts by 1.6%


Despite hopes for recovery after the pandemic’s two years in 2020 and 2021, Sri Lanka’s Gross Domestic Product (GDP) shrank by 1.6 percent in the first quarter of 2022 as the island country’s economic activity slowed dramatically. According to the Department of Census and Statistics (DCS), “factors such inflation, foreign exchange devaluation, and dollar deficit” are to blame for the economic downturn.

Additionally, it claimed that the first quarter’s shortage of chemical fertilizers had a considerable negative influence on agriculture, resulting in a sharp decline in rice production. Accordingly, the agriculture economy saw its biggest decline in this quarter since 2015, as per DCS. According to DCS, the limits on fuel imports had a negative impact on the industrial sector.

According to DCS, the shortage of chemical fertilizers caused a 33.8 percent decrease in rice production and a 15% decrease in tea production. The industries of “growing rubber,” “growing grains,” “growing vegetables,” and “growing fruits” all had declines of 13.1%, 9.5%, 8.4%, and 3.8%, respectively.

All industrial operations experienced declines in 1Q22, with the manufacturing of coke and refined petroleum products experiencing the largest decline at 24.3 percent.

Manufacturing of food, beverages, and tobacco products and manufacturing of textiles, wearing apparel, and leather products, the two industries that contribute the most to the manufacturing sector’s GDP, both saw contractions of 9.1% and 0.9 percent, respectively, this quarter.

Related articles

Recent articles