Sri Lankan economy records healthy growth: central bank

Sri Lankan economy grew by 8.1 percent during the first three months of 2006 well above the 4.4 percent growth recorded in the same period of 2005, the central bank here said Thursday.

"The impressive growth rate reflects continuation of the growth momentum," the bank said in a press release.

The bank had earlier predicted that the overall growth in 2006 would be around 7 percent.

The bank said that growth momentum in response to consumption and investment demand in the post-tsunami recovery period as well as economic opportunities that arose from a highly favorable agricultural performance had contributed to the growth.

However, the central bank noted that the recent escalation of violence in the troubled north and east, and the resultant security measures would slow down the economic activity.

"It is therefore necessary to make all efforts to maintain peace in the country," the bank asserted.

The economy, bleeding from a devastating ethnic separatist war has enjoyed uninterrupted expansion since 2001 when it recorded a negative growth for the first time since gaining independence from Britain in 1948.

The economic recovery was helped by the action to enter the Norwegian backed ceasefire as the first step in resolving the conflict.

The bank added that the high growth in the first quarter was possible with a 17 percent contribution coming from the fishing, hotel and restaurant sectors -- areas badly hit by the December 2004 tsunami tidal wave disaster.

The services sector had recorded the highest growth while the agricultural and industry sectors had also recorded growth.

Analysts say the overall economic growth in the current year may depend heavily on efforts to solve the separatist armed conflict.

The efforts are currently stalled by the surge in violence that has accounted for nearly 900 deaths since December last year.

Source: Xinhua