Sri Lanka News Updates with Discussions

Sri Lanka economy slows in first quarter as expansionary stimulus wears off


June 13, 2007 (LBO) ? Sri Lanka's economy slowed sharply to 6.1 percent in the first quarter of 2007 from 7.9 percent last year, as the conflict began to take its toll and the effects of an expansionary stimulus wore off.

The government's statistics office said gross domestic product grew by 7.4 percent in the last quarter, while in the second and third quarters of 2006 it was 7.8 and 7.9 percent.

Last year Sri Lanka grew by a record 7.7 percent according to the Department of Census and Statistics and 7.4 percent according to the Central Bank, which has a slightly different base year and data structure.

Deflated

With inflation from expansionary monetary and fiscal policies catching up, the implicit GDP deflator rose to 14 percent in the first quarter this year compareD to 6.9 percent in 2006.

The agriculture sector was stagnant, but industry grew by 7 percent and services grew by 7.1 percent, Director General of Statistics Suranjana Vidyaratne said.

Officials said the country was more peaceful in the first quarter of last year and the conflict has now affected even the south of the country, while drought has hit agriculture.

Last year the economy also received a 38.5 billion rupee transitory boost from printed money, while the momentum from tsunami aid flows in 2005 also kept the economy ticking.

In the first quarter of 2007, agriculture without fishing was down by 2 percent, but fish production was up 27.7 percent due to continued recovery after the tsunami.

Paddy production had fallen by 7.8 percent due to drought in the first quarter of 2007 and floods in the fourth quarter of 2006, the statistics office said.

Service Boost

The service sector brought 58.9 percent of the growth and industry 27.8 percent, Vidyaratne said.

The number of fixed phones had increased by 52.4 percent and mobile phones by 61 percent.

Wholesale and retail trade grew 5.1 percent, hotels fell 5.3 percent, and the transport and communications sector grew by 11.5 percent

The electricity gas and water grew by 7.5 percent with a larger share of hydro generation which industry watchers say was due to technical difficulties at Ceylon Electricity Board's thermal generators as well as a large independent plant putting them off line.

However the statistics department claimed it was due to 'better rainfall in the last year.'

Construction grew by 9.5 percent (10 percent in 2006) with 19 new condominiums of 260 units being completed.

Manufacturing was up 5.4 percent (4.1 percent in 2006) with factory industry up 5.8 percent and processing industry down by 3.3 percent. Textiles and garment industry was up 5 percent (0.9 percent in 2006).

Sri Lanka's budget deficit is projected at a massive 9.2 percent this year and the central bank has so far not printed money to bridge it resulting in sharply lower inflation.

However high domestic financing of the deficit has pushed risk free short term rates close to 17 percent.

Underground trains will solve the half of colombo traffic congestion.

Who says LTTE is Sinhala people's enemy?

In fact, LTTE is THE enemy of Tamil people!

GOSL MUST keep VP at the head table of LTTE at any cost!

But too expensive for SL, A monorail systems would be ideal.

http://www.lankanewspapers.com/news/2007/4/13649_space.html

Would have been nice. But too expensive for SL, A monorail systems would be ideal.

For the members who didn't see it yet. This is one of the Double-Decker Bullet Trains leaving Tokyo JR station's 21st or 22nd bullet trains only platform.

Have a look and try to feel the speed already it develops in the end of the platform.

Intriguing, but is that the one that runs on magnets?