Economy grows in second quarter

Balance of payment satisfactory:

Ramani Kangaraarachchi

The country has recorded a 6.4% economic growth in the second quarter of this year which is a 0.3% increase compared to the first quarter of the year, according to the Department of Census and Statistics.

It was 6.1 per cent at the first quarter of the year. The main sectors namely agriculture, industry and services have contributed to GDP by 11.9%, 27.7% and 60.4% respectively.

Director General of the Department of Census and Statistics D.B.P.S Vidyaratna told a conference held at the Information Centre yesterday the services sector has recorded a growth of 6.5% with the contribution of trade ,transport and communication.

The industrial sector has shown a growth of 7.1% compared to last quater. It is a 79.6% growth. The garments sector recorded 66% out of this growth.

Transport and communication sectors have grown by 8.3% compared to 11.9% in the second quarter of 2006 with the contribution of Communication, Postal , Port and Aviation. Postal and communication sector recorded a growth of 21.0%. The number of permanent telephone connections increased by 44.7% and mobile phones by 72.2% during this period.

The Colombo harbour and the South Asia Gateway Terminal has increased its operations by 3.2% counting 807,824 operations.

During the period registration of motor vehicles has recorded both drops and growth and SriLankan Airlines recorded an increase of income by 13.8%.

The import of luxury vehicles has increased for Audi by 16.7% and for Mitsubishi by 41.4%, Vidyaratna said.

However tourist arrivals dropped by 34.5% totalling 90,156 in the second quarter due to the security situation.

Retail and wholesale trading recorded an increase of 6.1% growth. The import trading increased by 1.8%. Imported agriculture fertilizer increased by 11.4% and crude oil imports increased by 61.0% she said.

Export trading has shown a 10% growth compared to the second quarter of the previous year and total export has recorded an increase of 20.8%.

Agricultural exports increased by 16.4% and tea exports increased by 12% while rubber exports increased by 19.4%.

Meanwhile, the Hotel and Restaurant sector has shown a minus growth of 18.9%. Total room occupation was 38.0%. According to the Colombo Stock Exchange the Milanka Price Index was 3,584 which was a 21.6% increase.

Earnings from foreign employment has increased by 13% at US$ 579.5 million. The country has obtained this growth despite increasing prices of crude oil and the war situation.

Vidyaratna said the balance of payment (BOP) was very satisfactory and it has shown a credit balance of US$ 239.8 million.

The value of export goods have increased by 12.9%. Migrant workers have sent US$ 646.3 million which was an increase of 12.2 per cent. This is adequate to pay the BOP of US$ 659.6 million.

Although the rupee value should go up under these circumstances it has not happened due to reasons such as adverse weather effects on agricultural sector and hydro power generation.

But the Government has been able to distribute power and energy throughout the country undisturbed and manage the economy properly.

International trade has shown positive results due to positive economic activities of countries like USA, Japan and Europe.

Only the north and east conflict has affected adversely towards the development of the economy.