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Sri Lanka central bank signals higher growth

[AFP, Wednesday, 1 July 2009 15:29 No Comment]

Sri Lanka has upgraded its growth forecast to more than three percent this year following the end of the island’s decades-old ethnic conflict, the central bank chief said Wednesday.

With the government declaring the end of fighting in mid-May, the bank expects economic expansion of 3.5 to 4.5 percent in 2009, up from an earlier projection of 2.5 percent to 3.0 percent at the beginning of the year.

"We have gone through one of the most difficult periods and we can now look to the future," central bank governor Nivard Cabraal said.

He said consumer prices had also eased in the South Asian island, with inflation in June hitting an all-time low of 0.9 percent from 3.3 percent reported in May due to lower food and energy prices.

"We are also now in a situation where inflation is less of a concern and the currency reasonably stable," Cabraal said.

The monthly inflation rate has been falling steeply since October 2008 on a tight monetary policy.

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