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S Lanka sees 5pc GDP growth this year

COLOMBO: Sri Lanka's central bank chief expects the economy to grow five percent this year, up from an estimated four percent in 1999, a newspaper reported on Sunday.

"I think economic growth will move at five percent this year compared to four percent last year," central bank governor A.S. Jayawardena told the Sunday Times in an interview.

He forecast good growth in the agriculture, services and telecommunications sectors in 2000.

A Reuters poll of 10 broker research houses last month estimated gross domestic product to rise by 4.9 percent in 2000.

Jayawardena predicted tremendous growth in telecommunications this year. "We would probably see the biggest expansion in this sector this year with some 100,000 lines being installed."

Sri Lanka Telecom, 35 percent owned and managed by Japan's Nippon Telegraph and Telephone Corp, is the country's main phone utility and has ambitious expansion plans for 2000.

Sri Lanka also expects to earn more from its main tea and garment exports, Jayawardena told the newspaper.

Tea earnings in 2000 were expected to rise to $665 million from $625 million in 1999 and garment exports would rise to $2.6 billion from $2.4 billion, he said.

Jayawardena said the expected signing of a free trade deal with India would also help boost Sri Lankan exports.

"That will open new vistas of trade, which are still not being anticipated now when we discuss growth scenarios."

Jayawardena said studies had shown that Sri Lanka might be able to increase its current $35 million worth of exports to India by as much as eight times under the deal.

The implementation of the deal, signed in 1998, has been delayed because of differences over content. But officials from both sides have indicated that these will be ironed out soon.

Jayawardena told the newspaper that the government needed to present the 2000 budget by March.

"The budget will have to be passed before March because there is no money for the government after March," he said.

President Chandrika Kumaratunga's government delayed the budget after calling a snap presidential election which she won last month.

Speculation has persisted that the government, seeking to hold early parliamentary polls, might delay the budget again.

But a top finance ministry official told Reuters on Friday the budget would be presented before March.-Reuters