Mar 31, Colombo: Showing resilience to the ethnic violence in the country, Sri Lanka economy grew by 6.2 per cent in real terms in the fourth quarter of 2006 culminating in an annual growth of 7.4 per cent, the highest since 1978 Central Bank (CB) said yesterday in its 2006 Annual Report.

Central Bank said that the economic expansion was commendable since it was achieved despite the major challenges of rising oil prices, increasing terrorist activity and several natural disasters of floods and landslides.

Accepting the report from the Governor of Central Bank, Ajith Nivard Cabraal at the Ministry of Finance, Sri Lanka President Mahinda Rajapaksa who is also the Finance Minister said he is pleased with the growth in the country despite many obstacles as it was achieved as a result of proper planning and efficient implementation of such plans.

During 2006, the country’s per capita income rose to US dollars 1,355 and unemployment rate declined to a lowest ever rate of 6.5 per cent according to the CB figures.

CB report said that economy expanded in all sectors despite relatively slower growth in the Agriculture sector due to bad weather and the trade union strike in the tea plantations. The Industry sector recorded the highest growth, supported by stronger growth in electricity, construction, and factory industry and quarrying sub sectors, it said. President Rajapaksa said he expects an annual eight percent average growth over the next five years and the Ten-year Horizon Development Framework 2006-2016 plan targets that goal.

Central bank suggested improving the economic and social infrastructure while providing the enabling environment to promote productivity improvements at firm level to achieve sustainable high growth with low inflation.