Regional disparity narrows - CB

Regional disparity in economic development is narrowing with the increase of regional economic growth, the Central Bank stated last week.

Provincial GDP data released by the Statistics Department of the CB revealed that the Northern province recorded the highest nominal 27.1 percent growth rate and increased its share of the national economy marginally to 3.7 percent from 3.4 percent in the previous year.The growth is driven by expansion in agriculture, fishing, construction, transportation and financial services.The main reason for the high growth in the Northern province was the improved performance in the agriculture sector. Paddy production of the Northern province increased by 90 percent to 210 million kilograms in 2011 compared to 2010. Significant increases in inland and marine fish production in the Northern province also contributed to this high growth in 2011.

Marine and inland fish production in the Northern province increased by 38 percent and 165 percent to 46,370 and 2,150 metric tons in 2011.

This high growth witnessed in the Northern province was also supported by the expansion of banking services, with 34 new branches established in 2011.

The share of the Western Province(WP) in the GDP declined further in 2011 to 44.4 from 44.8 in 2010, a continuation of the trend observed in the recent past. However, the Provincial GDP (PGDP) of the WP also grew at a healthy rate of 15.6 percent, largely underpinned by the expansion in manufacturing and trade, the CB stated in a report.

The North Western and Southern Provinces had the next highest growth rates of 21.9 and 21.4 percent and also increased their shares of the GDP to 10 and 11.1 percent.

These two Provinces benefited from greater contributions from trade, manufacturing, financial services and transport while the Southern province largely benefited from the high growth momentum in the construction sector.The nominal growth rates in the Eastern and North Central Provinces moderated to 12.4 percent and recorded a decline in their shares of the GDP to 5.7 and 4.6 percent due to a setback in the agriculture sector as a consequence of adverse weather conditions that prevailed in the first quarter of 2011.

The nominal growth of the Central Province GDP also decelerated to 14.5 percent from 18.9 percent in the previous year and its share of the GDP 9.8 percent from 10 percent.

The decline is due to the drop in hydro-power generation in the second half of 2011. All provinces recorded double digit nominal growth rates in their PGDP in 2011. PGDP of Sabaragamuwa Province decelerated to 15.7 percent from 19.1 percent in 2011 and PGDP growth and the share of the Uva Province remained at 15.5 and 4.5 percent.