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Monday, April 05, 2010 - 04.30 GMT |
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Rapid expansion
in Sri Lanka’s economy - Bloomberg |
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Sri Lanka’s economy expanded at the fastest pace in five quarters as the government stepped up spending on new roads and ports after the end of a quarter- century of war in the country, reported Bloomberg.
Gross domestic product rose 6.2 percent in the three months ended Dec. 31 from a year earlier after gaining 4.2 percent in the previous quarter, the Statistics Department said in a statement.
Central Bank of Sri Lanka maintained benchmark interest rates at a five-year low to boost consumer demand and drive growth to as much as 7 percent in 2010. Sri Lanka’s reverse repurchase rate is 9.75 percent and the repurchase rate is 7.5 percent, Bloomberg further said.
Central Bank can afford to keep borrowing costs low because of tame inflation in the country. Consumer prices in the capital, Colombo, rose 6.9 percent in February from a year earlier, almost half the average inflation rate between 2004 and 2009, the report added.
Commercial bank loans rose to 1.196 trillion rupees ($10.5 billion) in January from 1.195 trillion in December, the fourth gain in five months, according to the Central Bank, an indicator of growing consumer spending.
Sri Lankan exports rose 6.4 percent in December to $723.4 million after a yearlong decline.
Peace has prompted foreign companies, including HSBC Holdings Plc and Emirates Telecommunications Corp., to start operations in the island’s northern and eastern areas that were earlier under the control of the LTTE, added Bloomberg.
Sri Lanka plans to invite overseas and local companies this month to set up business in a new $550 million tax-free port zone in the island’s south. The country is also seeking foreign investments to help build a new terminal in Colombo port, quoting the Sri Lanka Ports Authority Chairman Priyath Wickrarma, Bloomberg reported.
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