Sri Lanka pins economic recovery on post-war revival

June 17, 2009 (LBO) – Sri Lanka's growth which plummeted to 1.5 percent in the first quarter may pick up later in 2009 with an agriculture and construction led recovery in former war-torn areas coupled with a global green shoots, officials said. The government defeated Tamil Tiger separatists last month in their last redoubt in the northeast of the island, after driving them out of the east of the island, much earlier.

Peace Hopes

"Without terrorist attacks anymore we expect agricultural crop to increase in the north," Nalini Kumarasinghe, of the national income accounting unit of Sri Lanka's statistics office said.

"Large areas of the north will be brought under cultivation with the rehabilitation of tanks."

Officials said in eastern Sri Lanka paddy production was up 50 percent in the last cultivation season after the war ended and civil administration was restored.

Kumarasinghe said inland fisheries, prawn farming and tourism is also expected to be revived.

"Construction in the north can also begin with friendly countries like Iran and agencies like ADB (Asian Development Bank) assisting to develop infrastructure in the area," Kumarasinghe said.

High quality mineral sands were also found in the are