Sri Lanka economy shrinks 8.4-pct in 2Q amid currency crisis

ECONOMYNEXT – Sri Lanka’s gross domestic contracted 8.4 percent in the second quarter of 2022, the state statistics office said as the country is caught in the worst currency crisis in the history of its intermediate regime central bank.

Agriculture contracted 8.4 percent, industry 10 percent and services 2.2 percent.

In rupee terms the economy inflated 33 percent.

Power cuts, fuel shortages, shortages of imported raw materials, fertilizer and disruptions in passenger transport hit the economy the statistics office said.

Sri Lanka’s rupee collapsed in 2022 to 360 to the US dollar in a failed float with a surrender requirement after two year of money printing triggered severe forex shortages.

Sri Lanka defaulted in April 2022 for the first time.

In Agriculture, growing of cereals contracted 32.3 percent, tea was down 19.7 percent paddy was down 15.6 percent), marine fishing was down 15.3 percent, rubber down 13.7 percent), animal production was down 13.6 percent) and growing of vegetables was down 13.2 percent.

But fresh water fishing was up 11.2 percent), Coconut was up 10.5 percent), forestry and logging was up 9.0 percent and spices was up 3.2 percent).

(Colombo/Sept15/2022)