Sri Lanka’s economy contracts 8.4% in Q2

Sri Lanka's economy contracts 8.4% in Q2

COLOMBO: Sri Lanka’s economy contracted 8.4 per cent in the April to June quarter compared with the same period a year ago, data from the government statistics department showed on Thursday (Sep 15), as the country struggles with its worst financial crisis in more than seven decades.

A severe dollar shortage, caused by economic mismanagement and impact of the COVID-19 pandemic, has left people in Sri Lanka fighting to pay for essential imports including food, fuel, fertilisers and medicines.

The embattled island of 22 million people saw its growth contract by 1.6 per cent during the first quarter of 2022.

The state-run Census and Statistics Department said agriculture shrank by 8.4 per cent in second quarter and industries by 10 per cent, while services shrank by 2.2 per cent, as compared to the same period a year ago.

Sri Lanka’s central bank estimates the economy to contract by about 8 per cent in 2022.