Status of GDP and its growth in provinces

Central Bank of Sri Lanka (CBSL) has compiled Provincial Gross Domestic Product (PGDP) for 2008, based on the disaggregation of the Gross Domestic Product (GDP) estimated by the Department of Census and Statistics (DCS). As already reported in the Annual Report of the Central Bank in 2008, the national GDP at current prices grew by 23.2 percent in 2008, reaching Rs.4,411 billion with a per capita income of Rs.218,161, equivalent to US$ 2,014. It’s disaggregation across provinces is given in Table 1.
The regional disparity declined in 2008 and has been declining from 1996. During the year, the Western province’s share in GDP reduced further from 46.5 per cent in 2007 (revised estimates) to 45.4 percent in 2008, while contribution from all other provinces except Uva province either increased or remained at the same level over the previous year. Southern and Northwestern provinces contributed 10.6 percent and 10.0 per cent to the GDP in 2008 compared to 10.5 per cent and 9.9 per cent respectively in 2007. Meanwhile, the Central, Eastern and Northcentral provinces also recorded improvements even though the contribution of each of these three provinces to total GDP still remained at less than 10 per cent. The Northern (2.9 per cent) followed by the Uva (4.6 percent) were the provinces with the lowest contributions to GDP.
As in the previous year, the Western Province continued to have the highest share of GDP, resulting from the high concentration of country’s major resources such as infrastructure facilities, banking and finance, industries, business centres, airports and the main sea port.
Another notable feature is that the provinces with smaller GDP have grown faster. Northcentral province, Eastern province, Central province, Northwestern province and Southern province recorded nominal growth rates of 45.1 percent, 30.7 per cent, 26.7 percent, 24.5 percent and 24.1 per cent respectively. In conformity with this observation, the Western Province with a high share of GDP grew slower. However, contrasting this observation, two provinces i.e. Northern and Uva which had smaller share in the GDP grew slower. These provinces require a further boost to develop income generating activities.

The per capita income in the Western province (Rs. 347,730 or US$ 3,210) was 1.6 times the national per capita both in 2007 and 2008, while all other provinces continued to fall below the national per capita income. The Central and Northcentral provinces showed marginal improvements in 2008, while the Uva province showed marginal decline.
The sectoral contribution to GDP in provinces shows a considerable disparity. The contribution by Agriculture to the GDP of the Western Province (the richest province) was only 3.2 percent, while the contribution from Industry and Services were at 31.7 percent and 65.1 percent respectively. This contrasts with contribution to the GDP by these sectors in 2008 in the four neighbouring provinces where the contribution from Agriculture was 19.6 percent, Industry 29.5 percent and Services 50.9 percent. The outermost four provinces had a high share of Agriculture of 26.4 percent in 2008 and lower shares from Industry and Services compared to the national GDP. This shows that with the increase of spatial difference between the Western Province and other provinces the contribution by Agriculture to the provinces increases.