Economy on an upward trend

by Gamini WARUSHAMANA

The Sri Lankan economy grew at 8.2 percent in the second quarter 2011 compared to the same period of the last year and the value of the GDP was recorded at Rs.686,928 m at constant (2002) prices, the National Accounts division of the Department of Census and Statistics said.

The Agriculture sector was seriously affected. Agriculture, forestry and the fishing sector has recorded 1.9 percent marginal growth.

Industry and service sectors have recorded a growth of 9.4 percent and 8.8 percent during the period.

The sub sectors that have posted significant growth are as follows: rubber 10.8 percent, fishing 16.7 percent, mining and quarrying 9.2 percent, manufacturing 8.5 percent, electricity, gas and water 12.3 percent, construction 10.6 percent, wholesale and retail trade 11.4 percent, hotels and restaurants 33.2 percent, transport and communication 11.6 percent.

The agriculture sector represents 11.4 percent of the GDP, industries 28.4 percent and services 60.2 percent.

During the second quarter of the year, the GDP implicit price deflater (2002=100) went up to 221.1 from 205.1 in second half of 2010.

This reflects the general price level of all goods and services and register 7.8 percent inflation for the second half of the year.

Inflation is based on CCPI and was 8.0 percent during the period compared to 5.8 percent in the same period in 2010.

The Agriculture sector grew at 6.3 percent in the second quarter of 2010 but severely affected by floods and heavy rain that prevailed during the Maha season 2010/2011. During the period under review, agriculture has shown a marginal recovery. Adverse weather conditions prevailed throughout Q4 of 2010 and Q1 of 2011. Value addition in the tea sector decreased by 3.3 percent during the period under review. Value addition in rubber production grew by 10.8 percent against 11.7 percent in the second half of 2010. Average rubber prices increased to Rs. 517.50 from Rs.357.33 in the corresponding period of 2010, at 44.8 percent.

Value addition in Coconut grew by 7.9 percent and the sector has recorded continuous negative growth through the last five years. Value addition in minor export crops declined by 10.1 during the period compared to 28 percent growth in the corresponding period in 2010. Value addition in paddy production dropped by 24 percent against 10.3 percent growth in 2010.

During this period, the industrial sector value addition in real terms grew by 9.4 percent as against 9.2 percent in Q2 in 2010. The manufacturing sub sector, the main contributor grew by 8.5 percent. Growth in other sub sectors are as follows: Factory industry 8.7 percent, Food and beverages 7.2 percent, Textile, wearing apparel and leather products 12.9 percent, Chemicals, petroleum, rubber and plastic products grew by 10.9 percent