Sept 27, Colombo: Sri Lanka's Central Bank lowered its 2012 economic growth estimate to 6.8 percent from an earlier 7.2 percent today due to the drought.
The Central Bank Governor Ajith Nivard Cabraal has said on Thursday that the estimated growth will be lower than expected earlier due to the prolonged drought.
"Right now our view is there will be reduction in growth from the earlier estimated 7.2 percent. Drought has been a factor and there are some sectors contributing to the overall reduction, while some sectors have done better than we expected," Cabraal has told Reuters.
Earlier this month, the Treasury Secretary Dr. P. B. Jayasundera predicted that Sri Lanka's economy this year may range between 6.7 percent and 7.2 percent depending on the impact of the current drought.
Sri Lanka recorded an impressive 8.3 percent economic growth for the year 2011. However, the Central Bank lowered the projected growth to 7.2 percent this year due to the rising global fuel prices.
During the first quarter of 2012 the economy expanded by a healthy 7.9 percent but the International Monetary Fund (IMF) in June lowered the economic growth forecast for Sri Lanka to a 6.75 percent this year.
The prolonged drought completely damaged the paddy fields in the country's rice bowl areas of North Central and Eastern provinces while lack of rains in catchment areas limited the production of cheap hydropower and forced the authorities to meet the energy requirement with more expensive thermal sources.