External sector moderates in first 4 months | Daily News

External sector moderates in first 4 months

Sri Lanka’s external sector moderated in the first four months of 2019 mainly due to the lessening of the trade deficit, a marginal increase in earnings from tourism, the decline in workers’ remittances and weaker financial flows.

The exports increased by 4.5 per cent to US$ 3,954 million in the first four months of 2019 while imports contracted by 17.4 per cent to US$ 6,412 million which has resulted in narrowing the trade deficit to US$ 2,458 million in the first four months of 2019, compared to US$ 3,981 million in the same period of 2018.

According to Mid –year Fiscal Position Report -2019 of the Finance Ministry.

Earnings from tourism increased marginally by 2.2 per cent to US$ 1,704 million in the first four months of 2019 partly due to the decline in earnings from tourism in April 2019 with the impact of Easter Sunday attacks.

Tourist arrivals increased by 2.2 per cent to 907,575 persons at end April 2019 from 888,353 persons at end April 2018. However, tourist arrivals in the month of April 2019 declined by 7.5 per cent to 166,975 persons from 180,429 persons in April 2018. The remittances from overseas employment declined by 13.8 per cent to US$ 2,171 million in the first four months of 2019, compared to US$ 2,520 million in the same period of 2018.

The Colombo Securities Exchange (CSE) reported a net outflow of US$ 24 million in the first four months of 2019 as against the net inflow of US$ 47 million in the same period of 2018.

The gross inflows to the Government including Treasury Bills and Bonds, long–term loans and International Sovereign Bonds (ISBs) recorded 3,199 million in the first four months of 2019.

At the end April 2019, the country’s international reserve position as reflected by the gross official reserves stood at US$ 7.2 billion which was sufficient to cover 4.1 months of imports.

Earnings from exports increased moderately to US$ 3,954.2 million in the first four months of 2019 due mainly to the increase in industrial and mineral exports despite a contraction in agricultural exports.

Earnings from industrial exports increased by 6.5 per cent to US$ 3,112 million in the first four months of 2019 owing to the increased earnings from textiles and garments by 9.9 per cent to US$ 1,832 million benefiting from higher demand for garments from the USA and non-traditional markets such as Canada, China, Australia and Brazil.

Export earnings from food, beverages and tobacco products increased by 6.5 per cent to US$ 165 million in the first four months of 2019 while export earnings from rubber products increased slightly by 1.9 per cent to US$ 286 million.

Export earnings from chemical products, base metals and articles, wood and paper products, and printing industry products contributed positively to the industrial exports in the first four months of 2019.

Earnings from agricultural exports declined by 2.2 per cent to US$ 825 million in the first four months of 2019 reflecting the decline in earnings from tea, rubber and minor agricultural products. Export earnings from tea declined by 6.7 per cent to US$ 446 million in the first four months of 2019 due to the combined effect of lower average export prices and the decline in export volumes.

Export earnings from rubber fell by 23 per cent to US$ 11 million while earnings from minor agricultural products declined by 15.5 per cent to US$ 35 million in the first four months of 2019 reflecting the reduction in export earnings from most of the subcategories particularly fruits, betel leaves and arecanuts.

Meanwhile, export earnings from vegetables, spices and seafood also increased in the first four months of 2019.


 

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