Economy grows 5.7% for first six months, Central Bank keeps year end target intact despite oil shock

Sri Lanka’s economy slowed down to 5.2 percent for the second quarter of 2004 dragged down by slower factory output for export goods and a prolonged drought, the Central Bank said Thursday. Sri Lanka’s economy slowed down to 5.2 percent for the second quarter of 2004 dragged down by slower factory output for export goods and a prolonged drought, the Central Bank said Thursday.

The economy grew 6.2 percent in
the first quarter and the Central Bank is still upbeat that the growth momentum
can sustain to end the year between 5.0-5.5 percent of GDP.

The optimism comes as the bank
warned on Monday that the balance of payments had deteriorated to US$ 223 mn for
the first six months, weighed down by sky high world crude oil prices and
subsidies on fuel and essential food items.

“Balance of payments will have
a slight surplus of between twenty to twenty five million dollars for the second
half of this year. But for the full year it will be two hundred million
dollars,” the bank’s Deputy Governor, W A Wijewarde