Central Bank forecasts 6% GDP next year

Sri Lanka’s economy could grow 6.0% in 2005 on a continued cease-fire between government troops and rebel forces, an easing of a drought that hurt agriculture this year and lower crude oil prices, said the central bank’s governor, Sunil Mendis. Sri Lanka’s economy could grow 6.0% in 2005 on a continued cease-fire between government troops and rebel forces, an easing of a drought that hurt agriculture this year and lower crude oil prices, said the central bank’s governor, Sunil Mendis. Mendis’ prediction is slightly more bullish than the central bank’s forecast of 5.0%-to-6.0% in September. Last week, the government estimated gross domestic product could expand 5.5%-to-6.5% in 2005.

A projected surge in tourist arrivals and foreign investment will also help next year’s GDP growth to exceed this year’s expected 5.0%-to-5.5% expansion, Mendis told Dow Jones Newswires in an interview late Wednesday.

“All round I feel we should have 6.0% growth,” Mendis said.

The Sri Lankan economy contracted 1.5% in 2001, but rebounded after a cease-fire in February 2002 halted a 20-year civil conflict between the Tamil Tiger rebels and the government.

Talks aimed at ending the war later stalled in April 2003 when the Tigers withd