2007 econ growth down from targets

Sri Lanka’s economic growth (GDP) is seen slowing down to around 6.7 percent from the original estimate of 7.5 percent due to tight monetary policies and lower agriculture production, the Central Bank said this week.

In the second quarter, the economy grew by 6.4 per cent, slightly higher from first quarter growth of 6.1 per cent.“The performance of the economy would be lower than expected during the year due to the tight monetary policy stance and some supply side shocks leading to a revision in growth forecasts.

The agriculture sector during the first half of the year recorded a slowdown. Tea production during the first half of the year was below expected levels largely due to the drought during the early months of 2007 and the impact of labour disputes in the last quarter of 2006. Further, the paddy production during 2006/2007 Maha season was somewhat lower than that of the previous year, which contributed to the lower growth in the agriculture sector,” the bank said.