Worker remittances mainstay of Lankan economy
View(s):Remittances, the most important contributor to the economy, from Sri Lankan workers overseas continued to swell ending up with a record US$6.8 billion in 2014, up 6 per cent from 2013, the Central Bank (CB) said this week.
In its monthly economic data report, the CB said that workers’ remittances increased by 25 per cent, year-on-year, to $636 million in December from $553 million in December 2012.
The Bank said Sri Lanka’s external sector strengthened further in December with continued inflows to both the Current Account and the Financial Account of the Balance of Payments (BOP). These inflows resulted in a significant increase in the overall balance as at end December 2013. Earnings from exports recorded an increase, while a notable reduction in imports was witnessed during the month, considerably reducing the trade deficit. Inflows on account of workers’ remittances and tourist earnings also recorded the highest values during a month, while inflows to the Financial Account increased moderately during December. The CB said earnings from exports, which surpassed $1 billion during the preceding two months continued to rise in December 2013, recording an increase of 13.2 per cent in December 2013, while expenditure on imports recorded a marginal increase of 2.1 per cent.
Earnings from the export of textiles and garments grew by 26.9 per cent year-on-year to $454 million in December 2013. Export of garments to the EU and USA, the major export destinations for garments, grew by 24.9 per cent and 35.6 per cent, respectively in December 2013.
Earnings from tea exports increased by 7.3 per cent to $148 million in December 2013, due to favourable prices that prevailed in international markets despite a decline in export volumes.
Earnings from tourism in 2013 increased by 35 per cent to $1.4 billion compared to $1 billion in 2012, exceeding the initial estimates for the year.