Sept 30, Colombo: Despite the ongoing ethnic conflict Sri Lanka's economy grew by 6.4 per cent during the second quarter of 2007, Sri Lanka Central Bank said on Friday in its Monetary Policy Review for September. This growth rate surpassed the growth of 6.1 per cent recorded in the first quarter of the year.

CB said the growth was due to the strong performance in the Industry and Services sectors as well as the recovery in the Agricultural sector.

Exports recorded the highest monthly growth in July 2007, while the increase in imports remained at a moderate level contributing to a 15.6% decline in the trade deficit during the first seven month period, it said.