Sri Lanka economy slows to 6.2% in 1H2007

Sept 13, 2007 (LBO) – Sri Lanka’s economy expanded 6.4 percent in the second quarter clocking up a 6.2 percent growth for the first half, coming off record highs in 2006, the government’s statistics office said.

The growth in gross domestic product (GDP) has slowed compared to an expansion of 7.8 percent in the first half of last year, with the first quarter growing by 7.8 percent and second quarter growing by 7.7 percent.

But the second quarter growth was higher than the 6.1 percent in the first quarter.

Sri Lanka’s economy was widely expected to slow this year with the effects of expansionary policies wearing off, and a downturn in tourism and a high budget deficit taking its toll on real activities.

Director General of Statistics Suranjana Vidyarathne said the high growth last year also caused growth numbers to appear small because of the effect of a large base.

Unemployment picked up slightly to 6.5 percent from 6.2 percent in the first quarter but Vidyarathne said it was statistically insignificant.

The services sector which has emerged as the star sector of the economy, grew 6.5 percent (down from 7.8 percent in 2006) in the second quarter while industry grew 7.5 percent (down