Sri Lanka econony waits for government to spend aid

A flood of financial support for Sri Lanka after the devastating tsunami has boosted the stock market to a record high and helped strengthen the Sri Lankan rupee against the dollar. A flood of financial support for Sri Lanka after the devastating tsunami has boosted the stock market to a record high and helped strengthen the Sri Lankan rupee against the dollar. But the government likely won’t manage to spend all the money to boost the economy and achieve its growth target, say experts.

The country has received pledges of aid and debt relief totaling $3.2 billion – equivalent to 16% of its annual gross domestic product – since the December tsunami which killed nearly 39,000 people and destroyed 114,000 homes.

The aid, from the International Red Cross and the Asian Development Bank, and from countries such as France and Japan, is mostly in the form of grants and is more than the estimated $2 billion bill for relief and reconstruction.

The central bank is hoping that this aid will help the country exceed the 5.3% growth target for the fiscal year ending Dec. 31 as the reconstruction effort gathers pace and in turn fuels the services sector which is the main growth