"In the trade of between economic growth – supported by fiscal deficit and liberal monetary expansion – and the control of inflation, the country has evidently opted in favour of the former," James Finlay and Company in Colombo told shareholders in an economic review.
"It is important, however to note that low inflation creates a vastly superior environment for stable growth and generally orderly conditions on all markets."
James Finlays had exported 8.8 million kilos of tea to 31 countries and earned 2.7 billion rupees in 2006.
Finlays said Sri Lanka's economy is expected to have grown by over 7 percent in 2006, driven by strong domestic demand, post-tsunami reconstruction and expansionary fiscal policy.
"The impressive GDP [Gross Domestic Product] performance was partly attributable to a marked increase in government expenditure," Finlays said.