Sri Lanka's economy shrank by 3.1% in Q2 on crisis impact

Sri Lanka's economy shrank 3.1% in the April-June quarter, official data showed on Friday, as the embattled country struggles to inch out of its worst financial crisis in decades. Sri Lanka's central bank projects that GDP will shrink by 2% this year, having contracted 7.8% in 2022, after the island's economy ran into a severe foreign exchange crisis that decimated growth.

Sri Lanka's economy shrank 3.1% in the April-June quarter, official data showed on Friday, as the embattled country struggles to inch out of its worst financial crisis in decades. The downturn was driven by high inflation, a depreciating currency and lower purchasing power, the Census and Statistics Department said in a statement.

The agriculture sector grew 3.6% from a year earlier, while output from industries contracted 11.5% and services dropped 0.8%, the department said. Sri Lanka's central bank projects that GDP will shrink by 2% this year, having contracted 7.8% in 2022, after the island's economy ran into a severe foreign exchange crisis that decimated growth.

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