Sri Lanka forecasts 1Q06 GDP at 6.8%

Sri Lankan Prime Minister Ranil Wickremasinghe (2nd R) arrives to visit the site of a bomb attack at St. Anthony's Shrine in Kochchikade in Colombo on April 21, 2019. - A string of blasts ripped through high-end hotels and churches holding Easter services in Sri Lanka on April 21, killing at least 156 people, including 35 foreigners. (Photo by ISHARA S. KODIKARA / AFP) (Photo credit should read ISHARA S. KODIKARA/AFP/Getty Images)

Apr. 26 (LBO) – Sri Lanka’s economy is expected to grow at an annual pace of 6.8 percent during the first quarter of 2006, despite setbacks in the peace process and worries that the country may slip back to war. Though the budget deficit was high at 8.7 percent of GDP, due to high nominal growth, of around 16 percent (GDP deflator of 9.8 percent plus real growth of 6.2 percent) and stable exchange rates that kept foreign debt from expanding helped improve debt situation.

– Mel Gunasekera “The growth in terms of my prediction for the first quarter is well over 6.5 percent,” Treasury Secretary P B Jayasundera told reporters Wednesday.

“In terms of the developments in the investment sector, exports, and it terms of developments in agriculture, industry, livestock an also variety of services, including private sector services, will produce, in my estimation near 7-percent growth in 2006.”

Despite high international oil prices and two days of attacks against Tiger rebel targets in the island’s northeast, the economic expansion will come from telecommunications, shipments of clothes and agriculture products.

“Good rainfall last year was also a tremendous blessing for food and energy securi