Agriculture and telecommunications also added to the higher growth, the bank said in a statement.

It said the fourth quarter of last year recorded a growth of 6.3 percent, maintaining an uninterrupted expansion every quarter since February 2002 when a truce between government troops and Tiger rebels went into effect.

The ceasefire put the breaks on a three-decade-old ethnic conflict which had claimed over 60,000 lives since 1972.

The bank noted that the economy was able to record the high growth rate despite higher international oil prices and stiff competition in the international clothing market for Sri Lanka's exports.

The island's 20 billion dollar economy has also weathered the December 2004 tsunami that killed an estimated 31,000 people and caused some 1.6 billion dollars in damages, according to the bank.

Good rain boosted the country's rice harvest and helped the country generate more electricity using cheaper hydro power.

However, the production of tea, the island's main export commodity, faltered due to excessive rains in the latter part of the year, which also saw prices drop by 7.3 percent in the fourth quarter.

Tsunami rebuilding activities gave the island's construction sector a boost creating extra work.

The telecommunications sector continued its blistering pace, with mobile subscribers increasing by 52 percent and fixed line services by 11 percent during the fourth quarter of 2005, the bank said.

Sri Lanka is banking on higher earnings from tourism, telecoms, infrastructure, and exports of garments and tea to notch a growth rate exceeding six percent this year, treasury secretary P.B. Jayasundera told business leaders last week.