Great Expectations: Sri Lanka's Post-Conflict Economic Boom Attracts Global Media Coverage, Higher GDP and Sovereign Ratings Expected

Jun 15, 2010, 12:26 ET from Government of Sri Lanka

WASHINGTON, June 15 /PRNewswire-USNewswire/ -- Sri Lanka's economic resurgence over the past year continues, according to international media coverage. The AFP has reported that "Sri Lanka's central bank raised its growth forecast for the year, citing strong post-war expansion in reconstruction and agriculture, particularly in former conflict zones."  Central Bank Governor Nivard Cabraal forecasted the economy will expand to 7 percent in 2010, higher than its previous prediction of 6.5 percent and a sharp rise on the 3.5 percent recorded in 2009, according to financial press reports.

The press coverage comes after the Central Bank Governor finished a two-day visit to Sri Lanka's north, home to most of the country's Tamil population.  From his trip he made the following statement: "Economic activity in the north and east is picking up in areas like farming, fishing, construction, dairy produce, banking and telecommunications.  2010 will be a good year."

Growth comes after the end of a 37-year conflict between the government and the terrorist group, LTTE.  According to United Nations data, the conflict claimed 100,000 lives.  

During his visit, Cabraal noted that the financial services industry is particularly growing in the North.  Tamil expatriates who send remittances are keys to the economic boom but also are helping Sri Lankans rebuild after the conflict.  

"The banking financial sector is keen to tap the vast deposit base as well as the foreign remittance market. A lot of diaspora cash is coming into the northern and eastern regions to help relatives rebuild their lives," said Cabraal.  

Recently, the Central Bank of Sri Lanka issued a road map to set out the policy actions the government will take for 2010 and beyond.  One of the goals is to upgrade the country's sovereign rating B+ (stable)/B (positive) to an investment grade of BBB- or above in the next four years.  To help achieve this goal, the central bank has appointed a Sovereign Rating Committee comprised of key stakeholders, including the government, private sector, business leaders, and rating advisors. Last July, the International Monetary Fund also provided a $2.6 billion bailout package.

The government is optimistic about ongoing economic advancement post-conflict.  "We are seeing growth in virtually all sectors, after the war ended," stated Cabraal.

This has been distributed by Qorvis Communications, LLC on behalf of the government of Sri Lanka.  More information is available at the United States Department of Justice, Washington, D.C.

SOURCE Government of Sri Lanka