Sri Lanka exports show tepid growth during first 5 months

Aug 02, 2017 (LBO) – Sri Lanka’s earnings from exports expanded in May by 7.8 percent to 841 million dollars, on an year-on-year basis, however during the first five months of the year, exports showed a slower pace of growth.

“On a cumulative basis, earnings from exports grew by 4.3 per cent (year-on-year) to US dollars 4,410 million during the first five months of 2017, as a result of higher income from exports of tea, spices, petroleum products and seafood,” the central bank said in a statement.

However, declines were seen in export earnings from textiles and garments, gems, diamonds and jewellery and food, beverages and tobacco during the period.

Expenditure on imports increased to 1,727 million dollars in May 2017 registering a 8.6 per cent year-on-year growth, reflecting higher demand for consumer goods and investment goods imports.

On a cumulative basis, import expenditure increased by 12.6 per cent to US dollars 8,610 million during the first five months of 2017 largely due to higher imports of fuel, rice and gold.

Imports of fuel and gold increased by 63 per cent and 102.2 per cent year-on-year, respectively, while expenditure on rice imports increased substantially by more than twenty-fold.

However, the central bank said imports of machinery and equipment, personal vehicles and textiles and textile articles declined during the first five months of 2017.

The cumulative trade deficit during the first five months of 2017 increased to US dollars 4,200 million from US dollars 3,415 million in the corresponding period of 2016.

Workers remittances declined for the third consecutive month in May 2017, by 3.7 percent to 575.4 million dollars on an year-on-year basis, as a result of “adverse economic and geopolitical conditions prevailing in the Middle
Eastern region.”

Cumulative inflows from workers’ remittances declined by 5.8 per cent to US dollars 2,797.0 million during the first five months of 2017, in comparison to the corresponding period of 2016.

“The overall BOP is estimated to have recorded a surplus of US dollars 1,586.6 million during the first five months of 2017 in comparison to a deficit of US dollars 1,142.4 million recorded during the corresponding period of 2016,” the statement said.

Sri Lanka 11th International Sovereign Bond of US dollars 1.5 billion in May, and a syndicated loan of US dollars 450 million helped strengthen the balance of payments position.

Foreign investments in the Colombo Stock Exchange during the first five months of the year recorded a net inflow of US dollars 191.1 million, including net inflows of US dollars 127.8 million and US dollars 63.2 million to the secondary and primary markets, respectively.

On a cumulative basis, the government securities market experienced a net outflow of US dollars 250.6 million during the first five months.