Sri Lanka’s economy expanded by 5.9 percent in 2005 and over 5.4 percent a year earlier, in the backdrop of high international oil prices and stiff competition for key exports like garments, the country’s Central Bank said Friday.
Economic growth during the fourth quarter of 2005 was 6.3 percent on higher inputs from agriculture, telecommunications, ports and apparel exports. Industrial exports dominated by textiles and garments reported a growth of 5.0 per cent in 2005 as against 18.2 per cent in the previous year.
Good rainfall contributed to bumper paddy harvest, while also helping the island generate more electricity using cheaper hydro power – which grew 26.2 percent.
However, tea, the country’s prime export commodity, faltered with excessive rains curbing production volumes during the latter part of the year. The damp weather conditions also saw prices fall 7.3 percent in the fourth quarter of 2005.
Tsunami rebuilding activities gave the construction sector a leg up creating extra work for other infrastructure related projects like road development, water supply and irrigation.
The telecommunications sector, continued its blistering pace, with mobile subscribers increasing by 52 percent and fixed line services by 11 percent during the fourth quarter of 2005.
Faltering tourism arrivals, which fell 24.6 percent in 2005, had a negative effects on hotel guests nights (36.5 percent drop), and restaurants (31.8 percent drop).
Tourist arrivals rose 40.2 percent in the first two months of 2006, according to Sri Lanka Tourist Board figures. The Ministry of Tourism expects arrivals to rise to 600,000 this year, after falling to 549,308 in 2005, after the December 2004 tsunami left most hoteliers struggling to fill rooms.
Sri Lanka’s $20 billion economy has recorded uninterrupted expansion since a February 2002 ceasefire halted the two-decade war.
The government is targeting growth of more than 6 percent in 2006, from higher revenues from tourism and export crops and infrastructure development, Treasury Secretary P.B. Jayasundera said on March 23.
President Rajapakse, who is also finance minister, is aiming to boost annual economic growth to 8 percent in the next six years.
“The economy can surpass 6 percent growth this year, unless there’s outright war and disruption,” Rachini Rajapakse, who helps manage the equivalent of $20 million of stocks and bonds at Unit Trust Management Co. in Colombo, told Bloomberg news. “The economy is bouncing back after the tsunami.”
“There was a slight slowdown in economic activity from the third quarter, because of elections and the heightened violence,” Vajira Premawardhana, director of research at Lanka Orix Securities Ltd. in Colombo, told Bloomberg. “The more stable interest rate environment will help the growth momentum this year,” he said.
Sri Lanka may start lowering its benchmark interest rate in the second quarter to fuel growth as inflation slows, Treasury Secretary Jayasundera said on March 23.
The Central Bank of Sri Lanka on March 15 left the repurchase rate unchanged for the third month at 8.75 percent, after increasing it by 1.25 percentage points in four steps last year to curb inflationary pressures arising from higher bank lending and oil prices.
Sri Lanka’s inflation rate slowed for the sixth straight month in February to 10.3 percent as prices of rice and vegetables declined due to favorable weather conditions, the Department of Census and Statistics said Feb. 28.
Sri Lanka’s export earnings rose to a record $625 million in December as the South Asian island shipped more clothes and rubber-based products, the central bank said last month.
Economic growth during the fourth quarter of 2005 was 6.3 percent on higher inputs from agriculture, telecommunications, ports and apparel exports. Industrial exports dominated by textiles and garments reported a growth of 5.0 per cent in 2005 as against 18.2 per cent in the previous year.
Good rainfall contributed to bumper paddy harvest, while also helping the island generate more electricity using cheaper hydro power – which grew 26.2 percent.
However, tea, the country’s prime export commodity, faltered with excessive rains curbing production volumes during the latter part of the year. The damp weather conditions also saw prices fall 7.3 percent in the fourth quarter of 2005.
Tsunami rebuilding activities gave the construction sector a leg up creating extra work for other infrastructure related projects like road development, water supply and irrigation.
The telecommunications sector, continued its blistering pace, with mobile subscribers increasing by 52 percent and fixed line services by 11 percent during the fourth quarter of 2005.
Faltering tourism arrivals, which fell 24.6 percent in 2005, had a negative effects on hotel guests nights (36.5 percent drop), and restaurants (31.8 percent drop).
Tourist arrivals rose 40.2 percent in the first two months of 2006, according to Sri Lanka Tourist Board figures. The Ministry of Tourism expects arrivals to rise to 600,000 this year, after falling to 549,308 in 2005, after the December 2004 tsunami left most hoteliers struggling to fill rooms.
Sri Lanka’s $20 billion economy has recorded uninterrupted expansion since a February 2002 ceasefire halted the two-decade war.
The government is targeting growth of more than 6 percent in 2006, from higher revenues from tourism and export crops and infrastructure development, Treasury Secretary P.B. Jayasundera said on March 23.
President Rajapakse, who is also finance minister, is aiming to boost annual economic growth to 8 percent in the next six years.
“The economy can surpass 6 percent growth this year, unless there’s outright war and disruption,” Rachini Rajapakse, who helps manage the equivalent of $20 million of stocks and bonds at Unit Trust Management Co. in Colombo, told Bloomberg news. “The economy is bouncing back after the tsunami.”
“There was a slight slowdown in economic activity from the third quarter, because of elections and the heightened violence,” Vajira Premawardhana, director of research at Lanka Orix Securities Ltd. in Colombo, told Bloomberg. “The more stable interest rate environment will help the growth momentum this year,” he said.
Sri Lanka may start lowering its benchmark interest rate in the second quarter to fuel growth as inflation slows, Treasury Secretary Jayasundera said on March 23.
The Central Bank of Sri Lanka on March 15 left the repurchase rate unchanged for the third month at 8.75 percent, after increasing it by 1.25 percentage points in four steps last year to curb inflationary pressures arising from higher bank lending and oil prices.
Sri Lanka’s inflation rate slowed for the sixth straight month in February to 10.3 percent as prices of rice and vegetables declined due to favorable weather conditions, the Department of Census and Statistics said Feb. 28.
Sri Lanka’s export earnings rose to a record $625 million in December as the South Asian island shipped more clothes and rubber-based products, the central bank said last month.
