May 04, 2012 (LBO) – Sri Lanka’s exports grew 7.6 percent from a year earlier to 878 million US dollars in February 2012 with tea exports falling and apparels barely growing, while imports powered ahead, official data showed. In the first two months of the year exports grew only 3.3 percent to 1.79 billion US dollars while imports grew 24.7 percent to 3.45 billion US dollars, expanding the trade gap 59.7 percent to 1.69 billion US dollars.
Sri Lanka has a persistent trade deficit because the Treasury borrows abroad exporting debt, and exported labour sends back remittances increasing the spending power in the domestic economy which generate imports.
In the first two months, in addition to 1.79 billion US dollars in goods exports, Sri Lanka has earned 943 million from labou exports and 807 million US dollars from the export of government debt. Tourism has brought a further 174.5 million US dollars.
However Sri Lanka’s peg with the US dollar has come under pressure from high credit growth and money printed to sterilize foreign exchange sales and keep interest rates down.
Agricultural exports fell 8.6 percent to 185.3 million US dollars with tea falling 11.6 percent to 105.1 million US dollars.