CB report card on the economy

The growth momentum in the economy has been continuing, supported by strong performance in all three sectors – agriculture, industry and services, the Central Bank said.

Despite the marginal decline in tea production, the agriculture sector benefited from the healthy production of rubber and coconut and the strong recovery in the fisheries sector.

The factory industries accounted for the increased output of the industrial sector. The services sector was led by the rapid expansion in telecommunications, cargo handling, financial services, and trade. In the light of these developments, the Sri Lankan economy recorded a growth of 7.5 per cent in the third quarter while overall growth in the first three quarters of 2006 was 7. 8 per cent, the Bank said.

Within the external front, export earnings in November 2006 grew by 24.3 per cent, reversing the decline recorded in the previous month.

This was underpinned by the developments in industrial exports, reflecting the strong performance in textiles and garments, diamonds and jewellery, and petroleum products. Imports increased by 15.7 per cent during the month.

While this was mainly due to higher imports of investment goods, imports of intermediate goods declined mainly due to lower imports of petroleum products. Cumulative exports during January - November 2006 grew by 8 per cent while imports increased by 15.8 per cent.

The resulting trade deficit was to a large extent financed by the private remittances, which expanded by around 20 per cent to US dollars 2,106 million during the first eleven months of 2006. With the increased inflows to the Capital and Financial Accounts the overall balance of payments is estimated to have registered a surplus of US dollars 187 million by end 2006.

Inflation, as measured by the point to point change in the Colombo Consumers’ Price Index (CCPI), declined from 19.8 per cent in November to 19.3 per cent in December, while the annual average of the CCPI increased from 12.7 per cent in November to 13.7 per cent in December.