Balance of payments, foreign reserves boost from CB
View(s):The Central Bank (CB), which regularly exudes a lot of confidence over Sri Lanka’s economic growth curve and regularly counters opposition criticism on these issues, said this week the balance of payments (BOP) recorded a surplus while international reserves had also grown.
During the period of January to July 2014 the BOP is estimated to have recorded a surplus of US$2.0 billion against a deficit of $179.7 million in the corresponding period of 2013. On the reserve position the CB said in a media announcement that as at end July, Sri Lanka’s gross official reserves amounted to $9 billion, while the same is estimated to have increased to $9.2 billion by end August.
In its monthly overview, the CB said in the continuing upward momentum observed during the first half of the year, export earnings improved further in July. Expenditure on imports also recorded an increase in July 2014 compared to the decline recorded in the preceding three months. A relatively higher increase in import expenditure resulted in a higher trade deficit in July 2014 compared to July 2013. However, inflows from workers’ remittances and tourism continued to strengthen the current account further, it said.
Earnings from exports grew by 11.1 per cent to $955 million in July recording a cumulative growth of 15.9 per cent during the first seven months of 2014.
All major export categories contributed to the growth in exports, while the largest contribution came from industrial exports. Reflecting the impact of seasonal demand, textile and garment exports grew at a higher rate while the exports of rubber products also increased, helped by an enhanced level of exports of rubber tyres.
Earnings from agricultural exports rose mainly due to enhanced performance in coconut and tea exports. The growth in kernel product exports drove the increase in earnings on coconut exports. In July, earnings from rubber exports declined mainly due to adverse weather conditions and a continuous drop in rubber prices in the international market. On tourism, the CB said earnings are estimated to have increased by 22.2 per cent to $202.7 million in August against $165.9 million in August 2013. In cumulative terms, tourism earnings soared by 32.1 per cent to $1.4 billion during the period.
Workers’ remittances in the first seven months of 2014 rose to $4.0 billion from $3.5 billion in the same 2013 period.