Sri Lanka’s economy records an impressive growth

Sri Lanka’s economy grew by 8.3 per cent in 2011, the highest in Sri Lanka’s post independence history, sustaining a growth momentum of over 8 per cent for the first time in two consecutive years.

According to the 2011 Central Bank Report, improved consumer and investor confidence arising from the peace dividend, favourable macroeconomic conditions, increased capacity utilization, expansion of infrastructure and renewed economic activity in the North and East underpinned this growth.

The report further said that inflation remained at single digit levels for the third consecutive year. It was supported by improved domestic supply conditions, prudent liquidity management by the Central Bank and benign inflation expectations.

The Report said the unemployment rate declined to its lowest level of 4.2 per cent in 2011 from 4.9 per cent in 2010. The total number unemployed was estimated at 342,000 in 2011 compared to 401,000 the previous year.

Domestic agriculture recovered significantly in the second half of the 2011 while export agriculture registered a mixed performance during the year. The Central Bank added that policy measures introduced by the Government improved agricultural production in 2011. The Industry sector remained resilient in a challenging international environment recording an impressive growth of 10.3 per cent in 2011. Similarly, the construction sector grew at a high rate of 14.2 % 2011 compared to 9.3 % growth in 2010, reflecting the major infrastructure development activities undertaken by the Government and increased construction activities of the private sector.

The services sector contributed 61.8 per cent to the overall economic growth expanding at 8.6 per cent in 2011.