Sri Lanka- Overview

The Sri Lankan economy grew strongly in 2006 with the economy growing by 7.8% during the first nine months of the year (compared to 5.8% the year before). However, overall growth for the year is expected to be around 7%. High growth in the first nine months of 2006 has been mainly due to post-tsunami recovery in the fisheries sector and continued buoyancy in telecommunications. Together, these two sectors accounted for 31% of overall growth. However, fishing output is yet to reach pre-tsunami levels, while continued tension in the North and East (NE)—the largest fish producing area in the country—could well mean that full recovery by year end may not be possible. The Colombo Stock Exchange has shrugged off security fears and other risks: the all share index rose 40% in 2006.