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| Sunday, 3 July 2005 |
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Macroeconomic stability improving :Economy grows 4.8% in 1Q, 2005The Central Bank (CB) said that the macroeconomic stability of the country is improving and the economy grew by 4.8% in the first quarter of the year. The point to point inflation rate as well as the annual average inflation rate is declining. In external trade the BOP has recorded a surplus. Petroleum prices have been adjusted to match increasing world prices. The investment-saving ratio is improving, CB officials told a press conference to mark the release of the third quarter GDP growth statistics. In the monetary sector, the country achieved reserve money targets last month. The GSP+ scheme agreed by EU is another positive factor for the growth of the export sector. The removal of Sri Lanka from the "list of war risk" by the London based Joint War Committee is another important factor to increase the ports and shipping activities and all the factors will contribute to continue the trend. In the first quarter of 2005, the GDP growth rate declined to 4.8% compared to 6.4% in the corresponding quarter of 2004, mainly due to the tsunami devastation on December 26. The fisheries and tourism industries and related economic activities were mainly affected by the devastation. CB has estimated that if the tsunami devastation did not occur the first quarter growth rate would have been over 6%. In the sectoral analysis the industrial sector grew by 6.9%, service sector by 5.3% and the agricultural sector by 0.5%, against 5.8%, 9.5% and -0.3% of the corresponding quarter of the previous year. Growth in the service and agricultural sectors declined due to the direct effects of the tsunami. (GW) |
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