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15/09/2023 16:46

Sri Lanka's economy shrank by 3.1% in Q2 on crisis impact

Official data released on Friday reveals that Sri Lanka's economy contracted by 3.1% during the April-June quarter, underscoring the country's ongoing struggle to recover from its most severe financial crisis in decades. This decline was primarily attributed to soaring inflation, a devaluing currency, and diminished purchasing power, as reported by the Census and Statistics Department.

In terms of specific sectors, the agriculture sector experienced a growth of 3.6% compared to the same period in the previous year. Conversely, the industrial output contracted by 11.5%, and the services sector saw a decline of 0.8%, as indicated by the department. Sri Lanka's central bank has projected a further 2% contraction in GDP for this year. This follows a substantial 7.8% contraction in 2022, brought about by a severe foreign exchange crisis that significantly impacted economic growth on the island.