In his statement, the MP states that a) industries in total contribute to 26.4% of GDP, b) industrial exports contribute 10% to GDP and c) 10% of export against the 26.4% production is a very low share of total industrial production to export.
To check this claim, FactCheck consulted the National Accounts and Annual Exports Statistics published by the Central Bank of Sri Lanka and World Bank Development Indicators.
On claim (a), according to the provisional data, the Gross Domestic Product (GDP) at Market Prices amounted to LKR 14,973 billion in 2020 where industrial production contributed LKR 3,930 billion, or 26.2%. This is in line with the minister’s claim.
On claim (b), industrial exports amounted to LKR 1,419 billion in 2020 which accounted for about 36% of industrial production and 9.5% of the GDP. This 9.5% of GDP that is exported in contrast to the 26.2% industrial production could explain the MP’s claim of 10% (Exhibit 1).
On claim (c), according to World Bank data on industry value added* and manufacturing exports for 2017, the median GDP percentage of industry value-added of lower-middle income (GDP USD 1,036 – 4,045 per capita) and upper-middle income (GDP USD 4,046 – 12,535 per capita) countries was 25.4% and 25.9% respectively – very similar to Sri Lanka’s industry value-added of 26.2%. However, Sri Lanka’s industrial exports of 9.5% was higher than the 4.3%, median share of exports of GDP of lower-middle income countries, and lower than the 19.0% median share of industrial exports relative to GDP of upper-middle income countries (Exhibit 2).
The validity of the minister’s conclusion that export contribution to GDP of 10% is low as a share of domestic production depends on whether Sri Lanka is benchmarked with the lower or upper middle-income countries. Sri Lanka with a per capita GDP of USD 3,682 at present, is close to the boundary of the lower- and upper-middle income country classifications. While the claim cannot be justified on the lower-middle income country benchmark of 4.3%, but it can be justified on the upper-middle income country benchmark of 19.0%. Furthermore, more than a quarter of the lower-middle income countries (for which data is available in 2017) have more than a 10% share of exports to GDP and half of them (lower-middle income countries) have more than a 20% share in exports – so the minister claim could also be justified as evaluating Sri Lanka against the top 25% of lower-middle income countries.
Therefore, we classify his statement as TRUE.
*Industry value-added denotes the total value-added in the industrial sector of an economy, one of the three sectors contributing to the total value-added to the economy, the other two being agricultural and services sectors.
**FactCheck’s verdict is based on the most recent information that is publicly accessible. As with every fact check, if new information becomes available, FactCheck will revisit the assessment.
Central Bank of Sri Lanka, External Sector Statistics, Exports, Imports and Trade, Exports – Annual (1990 to Latest) Table, available at: https://www.cbsl.gov.lk/en/statistics/statistical-tables/External-Sector [last accessed 26 April 2021]
Central Bank of Sri Lanka, Statistics, Statistical Tables, Real Sector, National Accounts, Gross Domestic Product by Industrial Origin at Current Market Prices Table, available at: https://www.cbsl.gov.lk/en/statistics/statistical-tables/real-sector/national-accounts
[last accessed 26 April 2021]
The World Bank, Data Bank, World Development Indicators, available at: https://databank.worldbank.org/source/world-development-indicators# [last accessed 18 May 2021]