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SL economy recorded an impressive
growth in 2011 – Central Bank Annual Report

Sri Lanka's economy grew by 8.3 per cent in 2011, the highest in Sri Lanka’s
post independence history, sustaining a growth momentum of over 8 per cent for
the first time in two consecutive years, the 2011 Central Bank Annual Report
said.
Improved consumer and investor confidence arising from the peace dividend,
favourable macroeconomic conditions, increased capacity utilization, expansion
of infrastructure facilities and renewed economic activity in the Northern and
Eastern provinces underpinned this growth, the report further said.
Inflation remained at single digit levels for the third consecutive year
supported by improved domestic supply conditions, prudent liquidity management
by the Central Bank and benign inflation expectations, the report added.
The unemployment rate declined to its lowest level of 4.2 per cent in 2011
from 4.9 per cent in 2010; the total number unemployed was estimated at 342,000
in 2011 compared to 401,000 the previous year, the Report said.
Domestic agriculture recovered significantly in the second half of the 2011
from the setback experienced during the first half while export agriculture
registered a mixed performance during the year, the Central Bank said, adding
that policy measures introduced by the government improved agricultural
production in 2011.
The Industry sector remained resilient in a challenging international
environment recording an impressive growth of 10.3 per cent in 2011. Similarly,
the construction sector grew at a high rate of 14.2 % 2011 compared to 9.3 %
growth in 2010, reflecting the major infrastructure development activities
undertaken by the government and increased construction activities of the
private sector.
The Services sector contributed 61.8 per cent to the overall economic growth
expanding at 8.6 per cent in 2011.
Total consumption expenditure increased significantly by 22.4 % while
domestic savings contracted widening the savings investment gap in 2011.
Earnings from exports increased by 22.4 % while the expenditure on imports
increased at a faster pace of 50.7% in 2011, compared to the corresponding
period of 2010.
Workers’ remittances, which constitute a greater share of private transfers,
continued to be the foremost foreign exchange earner in 2011, surpassing export
earnings from textiles and garments for the third consecutive year.
The Tourism Industry expanded substantially in 2011 both in terms of arrivals
and earnings; major international hotel chains are being established in Sri
Lanka while several reputed airlines have added Sri Lanka among their
destinations. Over the medium term, the industry is poised to achieve the target
of attracting over 2.5 million tourists and the tourist spending target to USD
150 per night by 2016 by facilitated high end tourists and infrastructure.
Following many notable achievements during the past two years, the Sri Lankan
economy is likely to experience a year of moderation and consolidation in 2012,
the Bank stated.
The Central Bank of Sri Lanka Annual Report 2011 is accessible at: http://www.cbsl.gov.lk/pics_n_docs/10_pub/_docs/efr/annual_report/AR2011/English/5_Chapter_01.pdf