Sri Lanka's exports grew in a higher speed than imports in the first quarter of 2007, resulting in a lower trade deficit, the island's central bank announced Wednesday.

"Exports during the first quarter of 2007 grew by 13.0 percent from 1.519 billion U.S. dollars in 2006 to 1.717 billion dollars in 2007," said the bank in a statement.

Imports during the first quarter of 2007 grew by 3.2 percent, while non-oil imports increased by 10.1 percent compared with the same period of 2006.

The cumulative trade deficit for the first quarter of 2007 reached 660 million dollars compared with 784 million dollars in 2006.

In March, export earnings grew by 17.7 percent and import expenditure declined by 2.4 percent, resulting in a trade deficit of 216.6 million dollars, which was 35.1 percent lower than the same month of 2006.

The Sri Lankan government is expecting the economy to grow more than 7 percent in the current year despite the escalation of armed conflict between government troops and Tamil Tiger rebels.

The Norwegian backed process of direct negotiations to end the conflict is placed in limbo as more than 4000 people have been killed in the upsurge of violence since the end of 2005.

Source: Xinhua