The Department of Census and Statistics (DCS) Sri Lanka, has released the estimated Gross Domestic Product (GDP) at current price and at constant (2015) price in Production approach and the other macroeconomic indicators for the first quarter (January 1st to March 31st) of 2024.
The GDP for the first quarter of 2024 at constant price (2015) has increased up to Rs. 3,329,583 million from Rs. 3,161,963 million which recorded in the first quarter of 2023.
The year-on-year GDP growth rate for the first quarter of year 2024 has been reported as 5.3 percent of positive growth rate.
The Agricultural, Industrial and Services activities expanded by 1.1 percent, 11.8 percent and 2.6 percent respectively in the first quarter of 2024.
Executive summary
Issuing a communiqué, on releasing National Accounts Estimates, the DCS states that the year-on-year GDP growth rate for the first quarter of 2024 has been estimated as 5.3 percent of positive growth rate.
Accordingly, the Gross Domestic Product for Sri Lanka for the first quarter of the year 2024 at constant price (2015) has increased up to Rs 3,329,583 million from Rs. 3,161,963 million which recorded in the first quarter of the year 2023. The following Figure 1 reflects the changes in the real GDP levels in the first quarter GDP series from the year 2018 to year 2024.
In addition, the Gross Domestic Product for Sri Lanka for the first quarter of 2024 at current price has increased up to Rs. 7,959,032 million from Rs. 7,339,004 million which recorded in the same quarter in year 2023 registering 8.4 percent of positive change in the current price GDP.
The three major economic activities of the economy; ‘Agriculture’, ‘Industry’ and ‘Services’ have contributed their share to the GDP at current prices by 7.7 percent, 26.2 percent and 58.9 percent respectively, while ‘Taxes less subsidies on products’ component has contributed 7.2 percent of share to the GDP in the first quarter of year 2024.
Meanwhile, Agriculture, Industry and Services sectors expanded by 1.1 percent, 11.8 percent and 2.6 percent respectively in the first quarter of 2024. In addition taxes less subsidies on products grew by 10.0 percent in the first quarter of 2024.
Background
The year-on-year GDP growth rate of the first quarter of the year 2024, is calculated compared to the real GDP value reported in the same quarter (first quarter) of the previous year (2023).
The Sri Lanka economy experienced a more favorable economic condition in the first quarter 2024, when compared to the first quarter in the year 2023. The high inflation had prevailed in the first quarter of year 2023, gradually reduced to a lower level by the first quarter of 2024 and this low inflation incentivized the economy by providing inputs at much lower price. This effect was more notable in construction industry which had been severely affected in first quarter 2023 by high input prices. In parallel to decrease in inflation, interest rate also showed decreasing behavior towards the end of first quarter 2024. Moreover, with the help of increased liquidity in foreign currency market, lifting import restrictions further, had more favorable impact to almost all the manufacturing activities in first quarter 2024. In addition, as a result of the increase in tourist arrivals, many related activities to tourism industry, have shown expansions during this quarter.
Performance in Agricultural Activities
In the first quarter of year 2024, the agriculture activities have recorded an expansion of 1.1 percent when compared to the 1.6 percent of growth recorded in the same quarter in the year 2023.
Aforementioned 1.1 percent expansion in the agricultural activities were largely driven by the growth of ‘Growing of cereals’ (22.4 percent), ‘Fresh water fishing and fresh water aquaculture’ (18.1 percent), ‘Animal production’ (6.1 percent), ‘Agriculture supporting activities’ (4.2 percent), ‘Growing of fruits’ (3.4 percent), ‘Growing of rice’ (2.8 percent), ‘Growing of spices’ (1.6 percent) and ‘Marine fishing and marine aquaculture’ (1.1 percent). Meanwhile, some agricultural activities, namely, ‘Plant propagation’ (26.3 percent), ‘Growing of rubber’ (7.4 percent), ‘Growing of other perennial crops’ ( 6.3 percent), ‘Growing of vegetables’ (5.1 percent), ‘Growing of tea (4.1 percent), ‘Forestry and logging’ (2.8 percent) and ‘Growing of oleaginous fruits’ (0.4 percent) reported contractions in the first quarter of 2024.
Performance in Industrial Activities
The industrial activities as a whole grew by an 11.8 percent in the first quarter of 2024 compared to the observed 24.3 percent decline in the first quarter of the previous year.
Among ‘Industrial activities’, coinciding with the decline in input prices, the ‘Construction industry’ grew by 14.2 percent, parallel to this, the ‘Mining and quarrying’ industry too expanded by 18.3 percent during this quarter. Similarly, The overall manufacturing industry grew by 10.6 percent during the first quarter 2024 with the help of the increases in almost all the manufacturing sub activities, except the ‘Manufacture of paper and paper products’ which recorded 2.9 percent decline in this quarter. All other sub activities in the manufacturing sector, namely, ‘Manufacture of basic metal and fabricated metal products’ (43.3percent), ‘Manufacture of coke and refined petroleum products’(31.6 percent), ‘Manufacture of chemical products and basic pharmaceutical products’ (19.9 percent), ‘Other manufacturing and repair and installation of machinery and equipment’ (19.2 percent), ‘Manufacture of food, beverages and tobacco products’ (11.9 percent), ‘Manufacture of wood and wood products’ (10.0 percent), ‘Manufacture of rubber and plastic products’ (9.7 percent), ‘Manufacture of machinery and equipment’ (8.3 percent) , ‘Manufacture of textiles, wearing apparel, leather and other related products’ (6.6 percent), ‘Manufacture of other non-metallic mineral products’ (5.3 percent) and ‘Manufacture of furniture’ (1.3 percent) reported expansions in the first quarter of 2024.
Among other industrial activities; ‘Electricity, gas, steam and air conditioning supply’ and ‘Water collection, treatment and supply’ grew by 11.7 percent and 12.9 percent respectively in the first quarter of 2024.
Performance in Services Activities
Most of the services activities recorded expansion in the first quarter of the year 2024 and reported 2.6 percent of overall growth in the services sector compared to the reported 4.6 percent of decline in the previous year’s first quarter.
Among the services activities, ‘Accommodation, food and beverage serving activities’ (40.4 percent), ‘Insurance, reinsurance and pension funding’ (17.8), ‘Postal and courier services’ (5.1 percent), ‘Transportation of goods and passengers including warehousing’ (3.5 percent), ‘Real estate activities and ownership of dwelling’ (3.1 percent), ‘Programming and broadcasting activities’ (2.5 percent), ‘Professional services’ (2.3 percent), ‘Education’ (2.1 percent), ‘Telecommunication’ (1.2 percent), ‘Wholesale and retail trade’ (1.1 percent), ‘Other personal services’ (1.1 percent) and ‘Financial service activities’(0.8 percent) reported positive growth rates in the first quarter 2024. On the contrary, only three services activities declined in this quarter, namely ‘IT programming consultancy and related activities’ (5.2 percent), ‘Public administration and defense’ (4.2 percent) and ‘Human health services’ (0.7 percent).
