Sri Lanka economy grows 7.9-pct in first quarter

July 01, 2011 (LBO) – Sri Lanka’s economy grew 7.9 percent in the first quarter of 2011, up from 7.1 percent in the same period a year ago, with strong growth in industry and services while the agriculture sector contracted.

Economic growth has been picking up with the end of the island’s 30-year ethnic war in May 2009. The industry sector grew by 11.1 percent and services by 9.5 percent while agriculture contracted by 5.1 percent, department of census and statistics said.

“We were a little concerned initially that because of the floods agricultural output may be low,” central bank governor Nivard Cabraal said.

“But power generation was substantial and that amply compensated,” he told LBO.

Cabraal said the Central Bank would maintain the annual target at 8.5 percent as initial information about the second quarter was “encouraging” and a decision on whether or not to revise the target would be taken after the second quarter GDP data is out.