The latest statistics issued by the Central Bank of Sri Lanka (CBSL) shows the Northern Provinces’ contribution to the Gross Domestic Production (GDP) recording a significant rise and that the regional disparity in economic growth was narrowing down. The North Western Province accounted for the second highest contribution of 10.7 percent in 2016, compared to 10.6 percent in 2015. The third highest contribution of 10.5 percent was observed from the Central Province in 2016, which was a marginal decline from 10.6 percent recorded in 2015.
Meanwhile, the second and the third highest Provincial nominal highest growth rates of 9.5 percent and 8.9 percent were recorded from the Northern and the Eastern provinces respectively, statistics show.
The share of the Western Province to the overall GDP has been on a decline since 2011. Its share to the GDP dropped from 39.9 in 2015 to 39.7 in 2016.
Even though the Western Province continues to drive overall economic progress, contributions from other provinces recorded a gradual increase with the expansion of regional economic bases.
Data shows that all provinces recorded positive growth rates in 2016, with Uva recording the highest growth rate of 12.4 percent in nominal terms.
The North Western and the Sabaragamuwa Provinces also recorded growth rates surpassing the national nominal growth rate of 8.1 percent.
Contributions from the Uva and the Northern Provinces increased marginally to 5.8 percent and 4.2 percent in 2016 compared to 5.6 percent and 4.1 percent in 2015, respectively.
Except for the North Central Province, the contributions to GDP from the other three provinces, namely Southern, Sabaragamuwa and Eastern, remained unchanged at 10.1 percent, 7.5 percent and 5.7 percent respectively, in 2016.
While the Western Province retained the highest value of Rs. 4,697 billion, the second and third largest values of Rs. 1,262 billion and Rs. 1,248 billion were recorded from North Western and the Central Provinces. The Southern Province retained the fourth position contributing Rs. 1,190 billion to national GDP in 2016.
Chief Economist of the Ceylon Chamber of Commerce, Shiran Fernando said that although the Western Province contributes more to overall GDP, its share has been on a declining trend since 2011.
The Northern region’s contribution has been improving and needs an increase in investment and improvement in connectivity to improve its growth trajectory. The 2018 Budget can set a policy direction such as empowering SMEs, improving investor confidence and climate so that economic activity in the lagging regions will also benefit.
The economy grew by 4.4 percent last year compared to 4.8 percent in the previous year.