Sri Lanka’s GDP Growth Exceeds Estimates on Domestic Spending
Sri Lanka’s economy expanded last quarter faster than analysts estimated as domestic demand helped offset a slump in exports.
Gross domestic product rose 6.3 percent in the three months to Dec. 31 from a year earlier, the statistics department said in a statement today, compared with 4.8 percent in July-to- September. The median estimate in a Bloomberg News survey of nine analysts was for a 5.5 percent climb. Growth in 2012 was 6.4 percent, the report showed.
The end of a 26-year civil war in 2009 has driven investment in roads and ports and brought gains in tourism, supporting expansion. The central bank held interest rates for a third meeting on March 8 in a bid to spur economic growth, after exports declined in all except one month in 2012 and bad weather hurt agricultural output.
“Sri Lanka looks well positioned to achieve slightly faster growth in 2013 given that the policy bias is shifting towards supporting expansion,” Samantha Amerasinghe, an economist at Standard Chartered Plc in Colombo, said before the release. She forecasts GDP will rise 6.7 percent this year.
The monetary authority raised borrowing costs in February and April last year and let the rupee weaken to tackle a trade deficit that pressured reserves. It then cut interest rates in December.
Central Bank Governor Ajith Nivard Cabraal said earlier in March that economic growth momentum is going to be “pretty strong” in the next few months. He predicts expansion of 7.5 percent this year.
The island’s rupee has strengthened about 1.2 percent against the dollar in 2013. The Colombo All-Share Index is up 1.1 percent in that period.
Agriculture fell 0.1 percent in the fourth quarter from a year earlier, while services rose 3.7 percent and industry grew 13.4 percent.
To contact the reporter on this story: Anusha Ondaatjie in Colombo at email@example.com