Earnings from exports grew significantly on a year on year basis in 2010, largely due to the industrial sector led to a significant increase in exports of machinery and equipment.
According to the external sector performance for April 2010 released by the Central Bank of Sri Lanka (CBSL) this week, earnings from exports grew by 24.2% to US$543 million.
Machinery and equipment comprised mainly of transport equipment such as boats, bicycles and electrical equipment like transformers, static converters, inductors and insulated cables. The CBSL noted that earnings from exports of rubber products, petroleum products, diamonds and jewelry also performed well.
Export earnings from textiles and garments increased marginally to US$227 million in April 2010 after seven consecutive months of year-on-year declines. Earnings from food, beverages and tobacco exports declined by 7.3% mainly due to lower exports of fresh and frozen fish. \Agricultural exports, which accounted for 24.4% of export earnings in April 2010, increased year-on-year, reflecting the sound performances by the tea, rubber, coconut and minor agricultural sectors, as they continued to gain higher prices in the international market. The CBSL also stated that in line with higher oil prices in the international market, the average export price of natural rubber increased by 126.7% year-on-year to US $3.16 per kg in April 2010. However, the rubber supply was affected by unfavourable weather conditions in April 2010.
Expenditure on imports also increased by 55.8% to US$967 million in April 2010, reflecting higher demand. According to the CBSL, expenditure on imports of intermediate goods increased led by higher petroleum and fertilizer imports. Import price of crude oil averaged at US$85.02 per barrel in April 2010, a year on year increase of 56.1%. Expenditure on imports of consumer goods increased by 63.6% due to higher expenditures incurred on imports of sugar, milk products and other food items.
The CBSL report stated that the trade deficit stood at US$424 million in April 2010 while the cumulative earnings from exports and expenditure on imports increased during the first four months by 10.7% to US$2,307 million and 42.9% to US$4,192 million respectively.
During the first four months of 2010, workers’ remittances increased by 14.5% over that of the corresponding period of 2009 to US$1,199 million. The gross official reserves, with and without Asian Clearing Union (ACU) funds, increased to US$5,440 million and US$5,215 million, respectively by end April 2010. Based on the previous 12 months average imports of US$955 million per month, the gross official reserves, without ACU funds, were the equivalent of 5.5 months of imports. |
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