Sri Lankan economy is projected to record a negative growth of around 1.7 per cent in 2020 compared to 2.3 per cent growth recorded in 2019 latest Central Bank report titled ‘Recent Economic Developments: Highlights of 2020 and Prospects for 2021’. However similar projections made by the International Monetary Fund (IMF) and Asian Development Bank (ADB), which estimate growth to reduce by 5.5%-6% in 2020.
As per the available official statistics, the economy contracted in the first quarter of 2020 by 1.6 per cent compared to a growth of 3.7 per cent recorded in the corresponding period of 2019. This contraction in the overall economy was largely driven by the setbacks in industrial activities. Agriculture activities also recorded a contraction, mainly due to the subdued performance of growing of tea and coconut, and fishing, negating positive contributions of growing of rice, cereals, vegetables and fruits. However, Services activities contributed positively to soften the overall negativity, mainly due to the considerable growth recorded in financial services, wholesale and retail trade, and other personal services.
‘’The achievement of the projected medium-term macroeconomic path is contingent upon implementing the identified reforms in the period ahead. Along with the establishment of a stable Government, the COVID-19 outbreak has created an opportunity to review macroeconomic policies and set appropriate policy priorities and long-term development goals for the country”” report said (CPR)