Economy records overall growth of 7.4 per cent
INFLATION: The Central Bank announced yesterday that as a
result of continued tight monetary policy measures and other measures,
the point to point inflation decelerated to 19.5 per cent last month and
the decelerating trend is expected to continue in the coming months.
Having taken this into consideration, the Monetary Board has decided
to continue with the current monetary policy stance. The CB further
stated that as per the Road Map for Monetary and Financial Sector
Policies in 2007 and beyond issued on January 2, the point to point
change in the Colombo Consumers' Price Index (CCPI) was estimated to be
above 21 per cent in March 2007.
CB's latest Monetary Policy Review said: "All three sectors of the
economy grew at healthy rates resulting in the economy recording an
overall growth of 7.4 per cent in 2006. The continued growth momentum
together with the resilience in the economy is expected to yield a high
growth in 2007 as well.
The external sector continued to perform well during the first two
months of 2007. Cumulative exports in the first two months increased by
around 10 per cent while imports grew by 7 per cent.
The Balance of Payments (BOP) recorded a surplus of US dollars 53
million up to February 2007 benefiting from the narrowed trade deficit
and the inflows to the government. The gross official reserves of the
country reached US dollars 2,578 million by end February 2007.
The tight monetary policy measures pursued by the Central Bank were
instrumental in the reserve money being well within the first quarter
reserve money ceiling. Growth in broad money also decelerated to the
range of 16 - 16.5 per cent from its higher levels of around 20 per cent
observed in 2006." |