Lanka’s BOP shows surplus in end November

Sri Lanka’s the overall balance of payments by end November 2007 recorded a surplus of US$616 million with the gross official reserves totalling $3,149 million (3.4 months of imports), the Central Bank said.

In a statement, it said following the expansion of 18-19 per cent in the two preceding months, earnings from exports contracted by 5.1 per cent in November 2007, year-on-year, to $591 million.

This decline in export earnings could be attributed to a contaction in earnings from key industrial exports including garments and textiles, rubber products, and diamonds and jewellery, the bank said. Industrial exports declined by 13.8 per cent with garments and textiles, which constituted 40 per cent of the total exports, declining by 12.9 per cent. Agricultural exports however, recorded a growth of 21.6 per cent, benefiting mainly from steadied earnings from tea.

The cumulative export earnings during the period January-November 2007 grew by 11.3 per cent, year-on-year, to $6,877 million. The expenditure on imports increased by 15.4 per cent, year-on-year, to $1,010 million, as a result of the expenditure on import of investment goods and intermediate goods increasing further. International oil prices, which hit a record above $95 a barrel was a major contributor to higher intermediate imports. Expenditure on consumer goods, however, declined by 15.9 per cent in November 2007 as a result of lower import of sugar and motor vehicles, while wheat was not imported. The cumulative expenditure on imports recorded an increase of 8.1 per cent, year-on-year, by end November 2007, and amounted to $10,142 million.

Private remittances during the period January-November 2007 amounted to $2,285 million, up 15.1 per cent, year-on-year, helping to contain the deficit in the current account.