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DateLine Sunday, 6 April 2008

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Lanka’s economy grew 6.8% in 2007 - Census Dept

In 2007, Sri Lanka’s economy grew at 6.8 per cent GDP (at constant prices 2002), at a lower rate compared to the previous year according to the Department of Census and Statistics (DCS).

The National Accounts Report of the DCS was released last week, before the annual report of the Central Bank (CB). The CB report was scheduled to be released last Tuesday but was later postponed.

The economic growth rate declined from 7.7 per cent recorded in 2006. However, the report said that this is a better economic performance for the year 2007.

According to the report, during the year, the inflation based on the GDP implicit deflator recorded 14.0%, a significant increase compared to 11.3% recorded in 2006.

In 2007, GNP per capita at current market prices recorded US $ 1,599, a remarkable increase compared to US $ 1,402 in the previous year.

The unemployment rate declined to 6 per cent from 6.5 per cent in 2006 and the report said that the trend is comparable with the growth rate.

While the continuation of the peaceful environment in the southern part of the country contributes to the growth, the intensified conflict situation in the North East adversely affected growth. Growth experienced in USA, Japan and European countries, the main trading partners backed the economic growth while the price hike in crude oil affected it adversely, the report said.

Growth in the agriculture sector slowed down to 3.3% in 2007 against 6.3 per cent in 2006.

The Agriculture sector excluding fishing has shown a marginal growth rate of 2.2 per cent and the fisheries sub sector grew at 15.6 per cent.

Paddy production recorded a 6.4 per cent negative growth in 2007. Total paddy production was 150.1 million bushels. The extent harvested decreased by 11.6 per cent compared to 2006.

The producer’s price of paddy increased by 33.6 per cent.

Tea production also recorded a negative growth during the last year. Production of mid-grown tea increased by 5.6 per cent while the production of low grown and high grown tea decreased by 3.8 per cent and 2.9 per cent. The average green leaves price increased to Rs. 40.86 per kilogramme from Rs. 29.19 in 2006.

The tea smallholders’ contribution is more than 70 per cent to the total tea production and its land area is 59 per cent, of the total land extent. The export quantity of tea decreased by 1.5 per cent against 2006, but export earnings increased by 23.9 per cent.

The industrial sector grew at 7.6 per cent in 2007 against 8.1 per cent in 2006. The manufacturing sector grew by 6.4 per cent, and the factory industry by 6.7 per cent. The industrial sector dominated the overall economic growth for the past few years and its contribution to the overall growth rate was around one-third of the total growth rate, the report said.

During the year hydropower generation decreased by 14.5 per cent compared to 2006 while thermal power generation increased by 23.4 per cent. Total power generation increased by 4.7 per cent compared to 2006.

The service sector recorded a 7.1 per cent growth and made the highest (59.6%) contribution to the country’s GDP growth in 2007. The service sector growth was mainly driven by the performance in the wholesale and retail trade and the post and telecommunication sub sectors.

The Post and Telecommunication sub sector grew by 21.5 per cent. The value addition in the telecommunication sector is 4.9 per cent. During the year the number of fixed phones in the country increased by 45.5 per cent and mobile phone penetration increased by 47.5 per cent, lower than the figures recorded in 2006, 51.4 per cent and 61.0 per cent, the report said. GW

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