Aug 15, 2008 (LBO) – Sri Lanka’s industrial exports plunged 9.3 percent in June 2008, with the key apparel sector slumping 8.9 percent, though total exports for the first six months still showed positive growth.
“In fact, I cannot recall a time where I have seen such a striking dichotomy between global commodity and credit markets each sending conflicting signals regarding the global outlook.”
The 2008 bubble was extended only because of the ‘liquidity’ or money printed by the Fed and other reserve currency central banks to prop-up gridlocked debt markets.
Wheat prices peaked in February 2008, most base and precious metal including gold peaked in March and oil seemed to have peaked in August.
IMF has called the 2008 boom the worst commodity bubble since 1973 when massive US money printing forced the dollar off the gold standard.
Though industrial exports may recover from its steep fall in June Sri Lanka’s industries have also been complaining of high domestic inflation created by Sri Lanka’s central bank which is making their products uncompetitive, due to an ‘overvalued’ currency.