The former conflict affected areas in the country has shown the highest nominal growth among all regions after the end of a 30-year war and the momentum is expected to continue, Central Bank Governor Nivard Cabraal said.

In 2009 the Northern Province had grown by 14.1 percent in nominal terms, which was the highest among all provinces, followed by the East at 14.0 percent, the Governor said.

The contribution to overall gross domestic product had increased to 3.3 percent in 2009 from 2.8 percent in 2006 in the North. In the GDP share had risen to 5.8 percent in 2009 from 4.9 percent in 2006.

"Although the figures have not been finalized for 2010, we believe the results will be similar to 2009," Governor Cabraal told a forum in Colombo.

"We expect that the range of investments made in these provinces will result in a growth rate of around 13 percent per annum in these provinces from 2011 onwards for the next five years."

Governor Cabraal said the Central Bank had intervened to provide 'financial inclusiveness' to the population in the north and east just as the war ended with plans made ready six months before the end of the war.

He said lack of access to basic services such as savings accounts will reduce savings, undermine financial planning, reduce investment and make them more vulnerable after retirement.

Lanka of access to credit leads to dependence on informal sources of finance at high interest rates, where people can neither invest nor save.
"Financial exclusion can therefore effectively wide the rich-poor divide and cause social exclusion," he said.

From May 2009 to May 2011, 37 bank branches and 22 extension offices had been opened in the Northern Province alone. In addition to Sri Lankan state and private banks, HSBC and Indian Bank had opened branches.

The Governor said the government was putting billions of dollars in to the northern and eastern provinces to improve infrastructure in sanitation, water supply, power, roads, irrigation and health which will help sustain growth for years to come.

From 2011 to 2013, 251 billion rupees would be invested in the north, with 50.9 billion planned for 2011 alone.

In the east 116 billion rupees had been invested from 2006 to 2010. In 2011, 26.6 billion rupees of investments were planned for the east.

The Governor said this is paving the way for larger private sector investments in the region and a reduction in poverty as new opportunities emerged.