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| Sunday, 26 December 2004 |
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| News Business Features Editorial
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Economy grows 5.5 per cent by Gamini Warushamana The Economy had grown over 5.5 percent during the first nine months of this year despite the oil shock and the severe drought that prevailed in the second and third quarters of the year. Accordingly, in the third quarter of the year the GDP growth rate is five percent at constant prices (1998), which is 0.5 percent below the growth rate of the third quarter of last year, an official of the Department of Census and Statistics (DCS) said. Economic analysts say that this is really a very satisfactory achievement under adverse internal and external conditions. They said that many economies in the world failed to achieve the projected growth rates as a result of the oil price hike and other external shocks. "It is a commendable achievement in this scenario to achieve a 5.5 growth rate", they added. Since the fourth quarter of the year, economic activities of all sectors have functioned well, and a growth rate of more than 5.5 can be expected for the year, they have predicted. In the third quarter of the year, the industrial sector has grown at 7.1% and the service sector at 6.6%. Industrial sector has achieved this growth despite the pressure against the oil price hike. They have predicted that the hiccups in the industrial sector would address if the Ceylon Petroleum Corporation reduced local oil prices in comparison to the decline of the world oil prices. However, the drought-hit agricultural sector has recorded a negative growth rate of 4.0%. They believe that the recent floods in the country too would continue to hamper the growth in the agricultural sector. But analysts believe that the negative growth would turn to a positive one at the end of the year. The inflation rate based on GDP Implicit Deflator has indicated an 8.6 per cent for the third quarter of 2004, which is indeed a significant increase, compared to the rate of 5.1 per cent recorded for the third quarter of 2003. |
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