2Q 2020 GDP largest drop ever but third quarter has positive growth
The second quarter of the 2020 GDP estimates, has shown an unprecedented fall in real GDP by 16.3 percent, with compared to the 1.1 percent of growth rate recorded in the second quarter of 2019, and it is the largest drop ever recorded in Sri Lanka history the Census and Statistics Department announced. However, the third quarter has resulted in recording 1.5 percent of positive growth rate in the economy for the first time for the year 2020.
Issuing a statement on determent web with all three language on releasing National Accounts Estimates for the second quarter of 2020 of 2020, the Department of Census and Statistics stated that during the period of March 19th to 20th of April, the whole country was being locked down with curfew imposed Until 26th of May, the Colombo and Gampaha where the major industrial zones and business places are situated, were under the imposed curfew. The lockdown period has affected adversely in every economic sectors of the country and recorded negative growth rates in their economic activities, specially, manufacturing, construction, passenger transport (land and air), mining and quarrying, tourism, other personal services, professional services, retail trade and some activities of agriculture like marine fishing.
The Gross Domestic Product for Sri Lanka for the second quarter of 2020 at constant price has declined up to Rs. 1,936,273 million from Rs. 2,312,078 million which recorded in the second quarter of 2019. In addition, the Gross Domestic Product for Sri Lanka for the second quarter of 2020 at current price has decreased up to Rs. 3,012,013 million from Rs. 3,589,246 million which recorded in the second quarter of 2019 registering 16.1 % of negative change in the current price GDP value.
The four major components of the economy; ‘Agriculture’, ‘Industry’, ‘Services’ and ‘Taxes less subsidies on products’ have contributed their share to the GDP at current prices by 9.7 percent, 24.8 percent, 61.2 percent and 4.3 percent respectively in the second quarter of 2020.
This favorable condition affected economic activities to perform well, especially in the third quarter which resulted in recording 1.5 percent of positive growth rate in the economy for the first time for the year. The country experienced the normalization of business activities and return to new-normality in day to day life style of the people, after the first wave of the covid-19 pandemic.
The GDP estimates of the second quarter of 2020, have reported contraction in all three major economic activities of Agriculture, Industrial and services by 5.9 percent, 23.1 percent and 12.9 percent respectively.
In addition, in the second quarter of 2020, the ‘Taxes less subsidies on products’ has recorded 30.1 percent of decrease with compared to the second quarter in the year 2019. This is due to the major fall in tax revenues due to the amendments made in the Tax rates and the thresholds. This has affected to slow down the overall GDP growth rate of the country.
The Gross Domestic Product for Sri Lanka for the third quarter of 2020 at constant price has increased up to Rs. 2,545,863 million from Rs. 2,509,418 million which recorded in the third quarter of 2019.(CPR)