      Business Editor : Eriq Dewanarayana
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Business Editor : Eriq Dewanarayana
|
GDP registers growth rate of 4.8 per cent in first 9 months of 1998
The Gross Domestic Product (GDP), in real terms, registered a growth rate of 4.8 per cent in the first nine months of 1998 despite the adverse global market conditions. In the third quarter of the year, the GDP grew by 4.1 per cent over the corresponding quarter of 1997. In the contest of recessionary conditions worldwide, this performance could be considered as satisfactory.
The quarterly GDP statistics released by the Central Bank earlier indicated growth rates of 5.8 per cent for the first quarter and 4.4 per cent for the second quarter of 1998.
In the third quarter of 1998 the production levels increased in manufacturing (by 7.1 per cent), construction (by 9.4 per cent) and services (by 4.6 per cent). The services sector contributed 59 per cent to the overall growth. The contributions of Manufacturing and Construction sectors to GDP growth were 30 per cent and 17 per cent, respectively. The contribution of the Agriculture, Mining and Quarrying sectors was a negative 6 per cent having received a setback when compared to the third quarter of 1997.
Commodity Prices continue year-long plunge in 2nd quarter
Commodity exporters worldwide have been hit hard by the more than year long plunge in commodity prices, which has seen energy prices fall 29.2 percent and non-energy prices fall 24.4 percent since the second quarter of 1997, reports Commodity Markets and the Developing World, published quarterly by the World Bank.
Energy prices face weak demand and rising inventories. OPEC producers have not yet cut production enough to balance the market, leaving a surplus at current prices. Prices are expected to remain depressed well into next year, barring an extraordinary surge in demand or a major disruption in supplies.
Beverages prices were down 10.5 percent over the previous quarter, and down 21.5 percent from the first quarter of 1998. The decline is attributed to high supplies of coffee and tea in major exporting countries.
Food prices were down more than 5 percent over the previous quarter as grains, soybeans, and sugar all tumbled. Sugar prices fell to 10-year lows, and there is little reason to expect prices to rally soon.
Metals prices continued to fall, ending the quarter down 3.7 percent. Demand for metals, such as aluminium and copper, continues to be weak in Asia. Precious metals have also faced slackened demand, with gold demand down 28 percent in the first half of 1998 compared with the level a year ago. India remains a bright spot for gold, with demand up 15 percent in 1998.
CDIC Ressoon Research
Consumer prices in 1998The Colombo District Consumers’ Price Index (CDCPI, base October 1996 to September 1997=100) computed by the Central Bank of Sri Lanka indicates a lower annual average inflation rate of 7.3 per cent for the year 1998, slightly lower than 7.4 per cent recorded in 1997. Generally, improved supply of food items helped to decelerate price increases during the year. The point to point increase of the Index (December 1998 over December 1997) at 4.0 per cent was substantially lower than 8.3 per cent for December 1997.
In December 1998 the CDCPI rose by 1.1 per cent to reach 113.8 mainly due to the seasonal increases in food prices in that month. The sub index for food rose by 1.5 per cent in December following a 4.9 per cent increase in November. Prices of all varieties of rice, dried chillies, onions, potatoes, coconut and a few varieties of vegetables increased due to both supply factors and greater demand on account of the festival season. However, contrary to normal seasonal increases, prices of several food items such as vegetables, eggs, fish and lime declined. The sub index for liquor and tobacco group increased by 3.3 per cent due to the full impact of higher taxation.
The Colombo Consumers’ Price Index (CCPI base 1952=100) published by the Government Department of Census and Statistics for the month of December was 2336.6. This represents a monthly increase of 1.2 per cent over the level of the previous month. Reflecting a similar trend to the Colombo District Consumer Price Index, the annual inflation for 1998 as measured by the CCPI at 9.4 per cent was slightly below the corresponding figure for 1997 which was 9.6 per cent.
According to the latest figures available for the Greater Colombo Consumers’ Price Index (GCPI, base January to June 1989=100) which is an alternative price index computed by the Department of Census and Statistics, the annual average inflation was 7.3 per cent in November compared with 7.4 per cent in the previous month.
