Sri Lanka’s gross domestic product has expanded by 1.6 percent in the third quarter, the state statistics office said, as the economy recovered from the worst crisis triggered by aggressive macro-economic policy.
The economy grew amid rising taxes, but exchange rate stability provided by largely deflationary policy and interest rates also eased as confidence returned.
“The input costs were declined parallel to the favorable change in exchange rate and the demand for debts which were at a lower level, showed a positive indication in this quarter along with the reduction in interest rate,” the census department said.
Agriculture expanded 3 percent in the quarter from the previous year, industries expanded 0.3 percent and services expanded 1.3 percent.
In agriculture, rice expanded 23.3 percent, vegetables 3.2 percent, fruits 5.4 percent.
Coconut sector contracted 6.1 percent and tea also contracted 1.4 percent.
In industry, textile and wearing apparel fell 10.1 percent, electricity and gas expanded 4.2 percent.
Construction continued to contract 5.5 percent. When a central bank fires a bubble by cutting rates, construction and capital good sectors are among those that take the biggest hit.
In services, wholesale and retail trade expanded 0.9 percent, transport and warehousing 5.7 percent.
Accommodation food and beverages expanded 34.9 percent amid a tourism recover and banking and insurance also expanded 29.6 percent.