By PTI
COLOMBO: Sri Lanka’s beleaguered economy is estimated to have contracted by 1.5 per cent in the third quarter this year due to the COVID-19-induced lockdown and a slew of import restrictions imposed by the government, the country’s statistics office said on Thursday.
The economic growth rate for the third quarter of 2021 is estimated at a negative growth rate of 1.5 per cent, the Department of Census and Statistics (DCS) said in a release of Sri Lanka’s GDP Summary Indicators for the quarter from July 1st to September 30th, 2021.
The GDP at constant prices (2010) has decreased by Rs 2,497,489 million by the third quarter of 2021 from Rs 2,536490 million reported in the third quarter last year.
In addition, the GDP at current prices rose by Rs 4,132,955 million in the third quarter of 2021, from Rs 4087,148 million reported in the same period of 2020, thereby recording an increase of 1.1 per cent, the release said.
During this quarter, the third wave of the pandemic, which had begun in late April 2021, had intensified by August and the quarantine restrictions imposed throughout the country from August 20, 2021 was extended for 41 days until October 1, it said.
During the third quarter of 2021, only agriculture witnessed a positive growth of 1.7 per cent, while industries and services contracted by 2.1 per cent and 1.6 per cent respectively, it added.
These numbers illustrate that while the Sri Lankan government allowed agricultural activities to function, several manufacturing and construction sectors remained grounded during this period due to the lockdown and quarantine restrictions.
The government had also imposed import and exchange controls due to forex shortages.
Analysts say the island nation’s foreign reserves had fallen to USD 1,587 million or one month of imports.
The increased input prices of producers due to import restrictions imposed as a solution for declining foreign money reserves also contributed to the slowdown in economic activity, the release stated.
Last month, Sri Lanka had temporarily shut down its only oil refinery for 50 days following the non-availability of crude oil supplies due to the foreign exchange crisis.
Sri Lanka’s Finance Minister Basil Rajapaksa had assured Parliament earlier this month that there would be no default in debt repayments and also ruled out seeking a bailout from the International Monetary Fund.
Rajapaksa visited India recently and was expected to work out a new US dollar swap and a loan to pay for petroleum products, the finance ministry said.
A similar arrangement was being worked out with Oman for oil purchases, the ministry added.
