During First Quarter:

Steady economic growth

The defeat of terrorism and the peaceful atmosphere prevalent in Sri Lanka has contributed to a steady growth in the country’s economy. The economic growth in the first quarter of the year amounted to 7 percent. Continuous growth in the agricultural, industrial and service sectors have contributed to this upward trend.

There had been a 9 percent growth in the agricultural sector, 6.9 percent growth in the industrial sector and 6.7 percent growth in the service sector. The growth rate in the last quarter of last year was 6.2 percent, states the Media Centre for National Development.

In addition to an increase in paddy production due to recultivation of fallow land, the forest and fishery sectors has also shown a constant growth. Tea, rubber and minor exports fetch high prices in the international market encouraging increase and improvement of cultivation in these sectors.

Production of tea in the first quarter of 2010 registered an increase by 27 percent compared to the same period last year, realizing an output of 102.3 million kilograms. Tea fetched high prices in the Colombo Auctions and in March tea fetched Rs 379.20 per kg, which was in the region of Rs 325.34 in the same period last year. However, there was a decline in coconut production due to coconut plantation being affected by pests in several districts.

Coconut production declined by 8 percent in the first quarter of this year compared to the same period last year.

However, the increase in the import tax for coconut oil encouraged oil production registering an increase of 31 percent, compared to the same period last year. Coconut oil production in the first quarter amounted to 21,667 metric tons. Paddy production recorded a historic increase in the last Maha season, registering the highest production since 1952, showing a 9 percent increase compared to the last Maha season. The production amounted to 2.6 million metric tons. The area of cultivation during this period too increased by 5 percent. The first quarter report of the Central Bank, claims that paddy production in the East, Mannar and Jaffna districts increased by 10.6 percent, 65.1 percent and 13.8 percent respectively.

Milk production in the first quarter amounted to 48.9 million litres which is an increase by 15 percent compared to the first quarter production last year.

The rapid development of infrastructure in rural areas, entering of the private sector for development of projects in many sectors and the reduction of loan interest and incentives given by the Government for many growth oriented activities including the fertilizer subsidy have helped to boost the economic growth in the first quarter, notes the Central Bank report.