Mar 31, 2008 (LBO) – Falling dependence on the US economy will allow Sri Lanka to ride out a recession in that country, a top central banker said, amid warnings that the current global turmoil may become deeper. Economics Research chief of Sri Lanka’s central bank P N Weerasinghe said the share of exports to the USA had fallen from 38 percent in 2002 to 25 percent in 2007, while the European Union’s share had accelerated to 39 percent from 29 percent.
The Middle East also bought 10 percent of Sri Lanka’s exports in 2007, compared to 8 percent in 2008.
Meanwhile most of Sri Lanka’s exports to the US were apparel which people would continue to wear despite a recession, unlike luxury industrial goods which may be hit.
“In any economic downturn the first line of casualties are the high-end luxury industrial goods,” Weerasinghe told a forum organized by Sri Lanka’s Citibank Sri Lanka.
“Even if there is a downward recession in the US market, more impact will be on IT export and electronics. Our exports are mainly apparel. I don’t see any reason that they will cut down on apparel.
“We will be in the last line of casualties. My personal view is the export sector wil