COLOMBO: Sri Lanka's economic growth accelerated at its fastest pace this year after the end of a bloody ethnic civil war in May, helped by new investment, official data released Friday showed.
The economy grew by 4.2 per cent during the third quarter to September, faster than the 2.1 per cent growth it posted in the second quarter.
‘Peace is a key factor that drove the economy during this quarter,’ deputy statistics director Nalini Kumarasinghe told reporters, adding that lower interest rates also helped propel investment.
Analysts expect the economy to gain pace, fuelled by reconstruction of the war-battered country's infrastructure, after government forces crushed the separatist Tamil Tiger rebels in May, ending 37 years of ethnic conflict.
But the island's economy was still feeling the effects of the global financial crisis and a poor monsoon, officials said.
The island's expansion was down sharply from the 6.3 per cent growth the economy logged in the same period a year earlier.
Sri Lanka's central bank is forecasting economic growth for 2009 of 4.5 per cent, after expansion of six per cent last year. For 2010, the central bank is hoping that growth will return to six per cent.
‘The stock market and hotels sector improved and investment sentiment improved during the quarter,’ Kumarasinghe said.
Sri Lanka's tiny 231-company listed stock exchange is one of the world's top performers as investors bet on long-term acceleration of the economy. The index has gained 96 per cent since the conflict ended in May.
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