Speedy economic development envisaged:

March to become Wonder Nation of Asia

Ariya Rubasinghe

Within one year after the total eradication of terrorism from our soil and unification of the country, all economic factors indicate that Sri Lanka is on a speedy march towards becoming the Wonder Nation of Asia as envisaged by the President, the Government and the patriotic masses. This factor is confirmed by the second quarter growth rates submitted by the Census and Statistics Department which indicate higher growth rates in all sectors

The country’s economic growth for the second quarter of this year (April to June) has registered an 8.5 percent increase, amounting to Rs 635 billion as against the corresponding period last year which amounted to the GDP growth of Rs 585 billion.

All sector growth

The agriculture, industry and services sectors have registered significant growth rates of 5.1 percent, 9.2 percent and 8.8 percent respectively, over the figures of the same quarter of the previous year. As per data provided by the Census and Statistics Department, the sub sectors which registered relative significant growth in the second quarter are ‘Minor export crops’, 20.7 percent, ‘Paddy’, 10.3 percent ‘Fishing’, 18.3 percent, ‘Manufacturing’, 8.9 percent, ‘Construction’, 9.3 percent, ‘Wholesale and retail trade’, 8.8 percent, ‘Hotels and restaurants’, 25.2 percent, ‘Transport and communication’, 12.9 percent and ‘Banking Insurance and Real Estate’ 8.5 percent.

The percentage share of the three major sectors, the agriculture, industry and services to the total GDP were reported as 11.9 percent, 28.1 percent and 60 percent respectively. The ‘Agriculture, forestry and fishing’ sectors showed a 5.1 percent growth during the second quarter. The growth rate of Miner export crops is recorded as 20.7 percent during the second quarter this year whereas it was (-) 2.0 percent for the same quarter the previous year.

Fishing sector

The overall fishing industry grew by 18.3 percent in the second quarter. Of these ‘Inland fishing’ grew by 15.7 percent and ‘Marine fishing’ grew by 18.6 percent. The prevailing favourable rainfall for fish breeding, the extension of aquaculture activities supported the growth of inland fish production in the North, East and North Central Provinces. The growth of the Marine fishing industry has reached a satisfactory level following the lifting of time restrictions on marine fishing, after the end of the war. This has recorded a steep increase in marine fish production in the Northern and Eastern Provinces amounting to 134.1 percent and by 45.8 percent respectively.

Industry sector

The real terms industry sector has grown by 9.2 percent in against 3.0 percent growth in the corresponding period last year. The growth rate of the gem industry has recorded an 8.5 percent increase contributing to export value of precious stones and semi precious stones to increase by 11.2 percent.

The factory industry has grown by 9.2 percent. The higher growth of factory industry was supported by the higher growth of textile, wearing apparel and leather products by 7.9 percent, chemicals, petroleum, coal, rubber and plastics products by 16.5 percent and non-metallic products by 15.9 percent.

Sub sectors

The growth rate for the sub sector of ‘Electricity, gas and water’ is 7.5 percent as against 4.3 percent in the second quarter of last year. Overall electricity generation grew by 8.2 percent during the quarter while Hydropower generation recorded a 37.7 percent growth.

Construction sector

The Construction sector has registered a 9.3 percent growth against 5.4 percent in the corresponding period last year. This growth was driven by the introduction of new development projects and large-scale projects already in operation.

The disbursement of loans for the development of houses, business premises, other building and construction and property developments have increased by 19.1 percent during the reference period. Cement production increased by 23.5 percent in this quarter against a (-) 8.7 percent, last year. Volume index of imported building materials increased by 32.1 percent in this quarter and it has decreased by 29.3 percent for the corresponding period of last year. Highways development and widening and improvement of roads have increased by 47.3 percent during the reference period.

Service sector

The data shows that the service sector too recorded a 8.8 percent growth rate due to the recovery of its major sub sectors such as wholesale and retail trade, hotels and restaurants and transport and communication. The growth rate in the same quarter of 2009 however, was as low as 1.2 percent.

The export trade sector recorded a 5.0 percent growth. Export earnings in the second quarter amounted to Rs 211,619 million, which was only Rs 179,264 million in the same period last year.

Hotels and restaurants

The hotels and restaurant sector experienced a significant growth with value addition indicating a 25.2 percent growth against (-) 0.4 percent of the same quarter last year. Tourist arrivals increased from 81,027 in the second quarter of last year to 118,243 in the second quarter of this year. Tourist earnings increased by 60.9 percent and the room occupancy rate increased from 35.5 in the second quarter last year to 50.8.

The Transport and communication sector has registered a 12.9 percent growth as against that of 5.7 percent in the same quarter last year. Passenger and goods transportation, Cargo handling, Ports and Civil Aviation and Posts and Telecommunications indicated a growth of 13 percent, 15.9 percent and 12.1 percent respectively for this quarter.

Vehicle registration

The total number of new registration of vehicles increased by 78.6 percent as against a 36.2 percent decline shown in the same quarter of the previous year. Registration of buses, three-wheelers and goods transport vehicles has increased by 786.3 percent, 139.3 percent and 235.7 percent respectively in the second quarter of 2010.

Passenger kilometers flown and passenger income on SriLankan airlines have increased by 20.7 percent and 30.3 percent respectively in this quarter due to increased tourist arrivals and added extra turns of flights. Passenger kilometers traveled, and daily-operated buses of the Sri Lanka Transport Board have increased by 19.0 percent, and by 2.6 percent respectively in the Q2 of this year compared to same period of last year.

Cargo handling

Cargo handling and Ports and Civil Aviation recorded a 15.9 percent growth in this quarter due to satisfactory performance of the international trade sector as a result of the gradual recovery of the global economy. The amount of total cargo throughput and container handling of the port authority has increased by 26.6 percent and 21.0 percent respectively. Cargo carriages of SriLankan airlines increased by 19.7 percent in this quarter.

The Banking, Insurance and Real estate sector grew by 8.5 percent in the second quarter against the growth rate of 5.4 percent in the same quarter last year. Non-interest income, loans, and advances have shown a dramatic increase allowing the financial sector to expand. (niz).

The writer is the Media Centre for National Development Director, Mass Media and Information Ministry