Sri Lanka cuts growth forecast for 2007: report

CEAT Kelani Holdings Managing Director Ravi Dadlani (right) and Lanka Ashok Leyland CEO Umesh Gautham exchange the OEM agreement

Sept 15, 2007 (LBO) – Sri Lanka’s central bank has cut the economic growth forecast for 2007 to 7.0 percent from an earlier 7.5 percent, a report said days after the government’s statistics office released the latest growth numbers. Sri Lanka’s economic expansion slowed to 6.2 percent in the first half of 2007 from a high of 7.8 percent last year when the island was helped by tsunami aid and expansionary fiscal and monetary policy.

A report by Bloomberg, a business newswire, quoted Central Bank Governor Nivard Cabraal as saying that the economy, which is now expected to grow at 7.0 percent, was resilient.

“Any country which did not have any strife would have been happy with this growth,” Cabraal was quoted as saying in the Indian city of Mumbai Friday.

“We are resilient.”

In the first quarter of 2007, the island’s economy expanded by 6.1 percent and the central bank said at the time it had not revised its target, provoking widespread hilarity among economic analysts.

The downward revision comes with a second quarter growth registering 6.4 percent with the economy battered by a civil war and a runaway budget deficit that was pushing up interest rates.

Independent analysts expect growth to be under 7.0

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