Sri Lanka economic growth may slow below 3 per cent

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COLOMBO, April 7 (AFP): Economic expansion in war- battered Sri Lanka could fall below three per cent this year, the central bank said yesterday, amid heavy defence spending and the global financial crisis.
"If things get worse, we expect economic growth to slow down to between 2.5 per cent to 3.5 per cent this year," said Central Bank of Sri Lanka governor, Nivard Cabraal.
"At best, it will grow to between 4.5 per cent and 5.0 per cent, but that is being a bit too optimistic," Cabraal said during the launch of the bank's 2008 annual report.
Sri Lanka's economy posted 6.0 per cent growth in 2008, down from 6.8 per cent in 2007.
Economists say the cost of the government's military campaign against the Tamil Tiger rebels has hurt the economy, with the defence budget taking up 1.6 billion dollars this year.