Sri Lankan economy likely to grow over 7 per cent in 2013
The tropical island faces contraction in agriculture growth due to adverse weather situation
Colombo: The Sri Lankan economy is expected to achieve 7.5 per cent growth in 2013, the country’s Central Bank has said. The projection was inspired by the 6.8 per cent growth recorded in the second quarter of 2013, it said.
With this second quarter growth, the economy achieved a 6.3 per cent growth in the first half of 2013. The growth momentum is expected to accelerate in the second half of the year with the anticipated recovery in the global economy, the Central Bank said.
The recovery in the global economy is likely to generate a healthy demand for exports while supporting growth in the tourism industry. Together with the improved external demand, domestic demand is also expected to rise due to enhanced purchasing power favorably impacting the manufacturing sub sector, it said.
Commenting on the economy, the bank said that both Industry and Services sectors contributed positively towards growth while the agriculture sector contracted. The Industry sector maintained its growth momentum registering an expansion of 10.1 per cent while Services sector grew by 6.6 per cent.
However, the Agriculture sector saw a contraction by 1.1 per cent mainly due to the drop in coconut and rubber production because of adverse weather conditions.
Agricultural crops such as paddy and other food crops recorded lower than expected output. The trade, transport and financial services is also expected to expand in tandem during the second half of the year with further expansion in the manufacturing sector.
The recent growth momentum seen in the construction sector is also likely to continue during the second half of the year supported by infrastructure development drive in the country. “With these anticipated developments in the external sector and domestic economy, the projected growth of 7.5 per cent for 2013 is likely to be realized, thereby moving the economy towards its potential growth path in the medium term,” the apex Bank said.