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| Sunday, 5 January 2003 |
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Private sector urged to be more active Sri Lanka's private sector is still adopting a 'wait and see' attitude. This trend does not augur well for the future development of the country, therefore it should act faster, said Dr Anila Dias Bandaranayake, Director Statistics Central Bank. Addressing a media conference held to release the third quarter economic data, Dr Bandaranayake said that during the third quarter ending September 2002, the GDP had recorded a 5.3 per cent growth compared to the same period of the previous year, which recorded a negative 4.2 per cent. The third quarter growth of 2002 is the highest recorded since the same period of 2000. On a cumulative basis, GDP grew by 2.7 per cent during the first three quarters of 2002. The main contributory factors were the continuation of the ceasefire, removal of the war risk surcharge on sea and air travel in March, a decline in inflation and interest rates, increase in capital flows, a stable power supply, favourable weather conditions and improved business confidence with clearer prospects for peace. The highest growth rate of eight per cent was recorded by the services sector. The industry sector grew by 3.1 per cent and agriculture by 1.2 per cent. The services sector contributed 79 per cent of the overall economic growth with all major sub-sectors including transport, trade, communication, financial services and tourism performing well during the quarter. Banking, insurance and real estate services recorded a 15 per cent growth. Manufacturing, the largest sector in the industry category, grew by six per cent in the third quarter. The factory industry sub-sector grew by seven per cent while the electricity, gas and water sub-sector grew by 5.5 per cent. The agriculture sector performed positively due to improved weather conditions. The performance of plantations agriculture was mixed. Paddy production and vegetable production increased marginally while subsidiary food crops recorded a three per cent drop. Minor export crops recorded a 15 per cent growth while the export volumes of cardamoms, pepper, arecanuts, coffee, nutmeg, maize and betel leaves increased considerably compared to the corresponding period of 2001. Animal husbandry displayed a mixed performance. Poultry production improved while milk production dropped. Non-paddy domestic agriculture grew by 0.9 per cent. W.A. Wijewardena, Deputy Governor of the Central Bank said with positive economic conditions, the annual growth for 2002 will be higher than three per cent, which was earlier projected. He said increasing investor confidence and seeking a permanent settlement for the North-East problem are paramount to increase growth to seven-eight per cent to reach the country's maximum potential. Dr A.G. Karunasena, Director Economic Research Central Bank said if war breaks out in Iraq, there will be a possible increase of fuel prices, but the improved reserves position and enhanced support from the World Bank and International Monetary Fund will help mitigate these effects to a large extent. |
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