Sri Lanka Forecasts Stronger GDP Growth

By Park Sae-jin Posted : June 8, 2010, 10:02 Updated : June 8, 2010, 10:02

   
Sri Lankan President Mahinda Rajapaksa smiles during a campaign rally for the upcoming parliamentary elections in Ambalanthota, about 160 kilometers (100 miles) south of Colombo, Sri Lanka [AP]
 
By Um Yoonsun

Fresh investments and consumer optimism spurred by the end of the war in Sri Lanka are helping the economy here more than expected, said the country's central bank governor.

The Central Bank of Sri Lanka likely will raise its projection for gross-domestic-product expansion this year to 7% from an earlier estimate of 6%, said its governor, Ajith Nivard Cabraal. The revision could happen as early this week, he told The Wall Street Journal.

"We have already started to enjoy economic activity taking a very quick march upwards," he said in an interview from his Colombo office overlooking the Indian Ocean. "The stock market is doing much better, bank lending is coming back and local investors are getting upbeat about what they should be doing."

Mr. Cabraal said the central bank was waiting to confirm whether the strong numbers for the first quarter were in line with initial estimates. If they are as strong as he expects, then the bank will raise its forecast, he said.

Expatriate Sri Lankans are sending more money home, foreign investors are expanding their operations here, the government is in the middle of an infrastructure push and local consumers and companies are spending more than before, confident that their spending plans won't be spoiled by war.

Last year the government won its three-decade-long war against the Tamil Tiger separatists, opening the north and east of the country to more development and so far ending regular terrorist attacks in the country's capital of Colombo.

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