Good rainfall contributed to bumper paddy harvest, while also helping the island generate more electricity using cheaper hydro power – which grew 26.2 percent.

However, tea, the country’s prime export commodity, faltered with excessive rains curbing production volumes during the latter part of the year.

The damp weather conditions also saw prices fall 7.3 percent in the fourth quarter of 2005.

Tsunami rebuilding activities gave the construction sector a leg up creating extra work for other infrastructure related projects like road development, water supply and irrigation.

The telecommunications sector, continued its blistering pace, with mobile subscribers increasing by 52 percent and fixed line services by 11 percent during the fourth quarter of 2005.

Faltering tourism arrivals, which fell 24.6 percent in 2005, had a negative effects on hotel guests nights (36.5 percent drop), and restaurants (31.8 percent drop).

Sri Lanka saw a three percent drop in tourism arrivals last year with only 549,300 holidaymakers visiting the country.

The trade is counting on 600,000 visitors this year, after the December 2004 tsunami -- which killed an estimated 31,000 people and affected about a fifth of the island's 250 star-class hotels – left most hoteliers struggling to fill rooms.

Treasury secretary P B Jayasundera expects the economy to expand in excess of six percent in 2006, on the back of higher revenues from exports of tea and garments, telecommunications and infrastructure projects getting off the ground.

Please click to read Central Bank's statement on 2005 economic performance

-Mel Gunasekera: mel@vanguardlk.com