By: Staff Writer
March 20, Colombo (LNW): Sri Lanka’s economy made a significant recovery in 2024, posting a 5% growth, reversing the 2.3% contraction seen in 2023. This turnaround was driven by strong performances in the industrial and services sectors, which grew by 11% and 2.4%, respectively, compared to previous declines in 2023. The agriculture sector grew by a modest 1.2%, a slowdown from the 2.6% growth in 2023.
The breakdown of GDP contributions at current prices showed the services sector leading with 57.5%, followed by industry at 25.5%, and agriculture at 8.3%. Additionally, taxes less subsidies contributed 8.7%. In the fourth quarter of 2024, the economy grew by 5.4%, outperforming the 4.3% growth of the same quarter in 2023, with industrial activities growing by 13.1% and services by 2.5%. However, agriculture faced challenges, posting a 2.2% decline in the same period.
This positive growth follows two consecutive years of economic decline in 2022 and 2023, signaling a path toward a more optimistic economic outlook. The growth was supported by higher export and import volumes, increased port activities, and greater vehicle registrations, especially for freight and agricultural vehicles. A stabilizing Sri Lankan rupee and declining inflation further contributed to this improved economic environment. Private sector credit and liquidity also increased due to lower interest rates.
The recovery was notably driven by key sectors like manufacturing, construction, trade, and transport, which experienced expansions. Notably, industrial activities grew by 11%, recovering from a 9.2% decline in 2023. Sub-sectors like construction and mining saw robust growth of 19.4%. Manufacturing also reported positive results, with notable increases in basic metal products, textiles, furniture, chemicals, and food processing, among others.
Services also contributed to the recovery, with a 2.4% growth compared to a slight decline in 2023. Key drivers included accommodation, food services, and postal services, while sectors like insurance, public administration, and health care showed declines.
Agricultural activities grew by just 1.2%, down from 1.6% in 2023. Some segments within agriculture, like animal production and cereal growing, reported strong growth, while others, including plant propagation and growing of coconuts, experienced significant declines.
Overall, the economy of Sri Lanka in 2024 showed resilience and positive momentum across various sectors, offering hope for sustained growth in the coming years.
