Export earnings down in 2016, imports up amidst rupee losing value-Central Bank
View(s):Sri Lanka’s export earnings fell by 2.2 per cent last year amidst a 2.5 per cent increase in import costs to US$19 billion compared to 2015 and a sharp depreciation of the rupee against the US dollar, according to latest Central Bank (CB) data.
Foreign outflows (sales) from the government securities market amounted to $324.3 million in 2016, lower in comparison to a net outflow of $1,093.4 million during 2015.
The CB’s end-of-2016 statistics show that the rupee, which depreciated by 3.8 per cent against the US dollar in 2016, recorded a further depreciation of 1.2 per cent by 24 March 2017.
The country’s gross official reserves as at end December 2016 amounted to $6 billion, equivalent to 3.7 months of imports while total foreign assets, which include gross official reserves and foreign assets owned by deposit taking corporations, stood at $8.4 billion, equivalent to 5.2 months of imports.
On the positive side, earnings from tourism rose to $3.6 billion in 2016 from $3 billion the previous year while workers’ remittances rose to $7.2 billion against $7 billion during 2015.
While tourist arrivals rose by 14 per cent in 2016, India, China, the UK, Germany and France were the top source markets accounting for 51 per cent of total tourist arrivals in 2016.period.
In terms of exports, the CB said the performance of industrial and agricultural exports, appears to have benefitted from the gradual improvements in global economic conditions and improved trade relations with major trade partners.
The largest contribution to the growth in exports was from industrial exports supported by the substantial increase in exports of printing industry products and rubber products.
However, earnings from garment exports, declined marginally due to lower demand from the USA market, despite the growth in exports to non-traditional markets, such as Canada, China, Australia and the UAE as well as to the European Union (EU) market.
“… earnings from seafood exports continued its impressive growth momentum observed since July 2016 after lifting the ban on seafood imports from Sri Lanka to the EU,” the release said.
Expenditure on intermediate goods, which accounts for about 55 per cent of total imports, increased by 17.3 per cent, year-on-year, in December 2016, passing the $1 billion mark for the first time since August 2014. The increase in expenditure on fuel imports by 51.8 per cent largely contributed to the growth in imports. This included a 113.8 per cent growth in refined petroleum imports and a 10.4 per cent growth in coal imports due to higher thermal and coal power generation as a result of the prevailing drought conditions in the country.
Expenditure on personal vehicles, fuel and fertiliser imports declined in 2016 from the level observed in 2015. China, India, the UAE, Singapore and Japan were the main import origins in 2016, accounting for about 57 per cent of total imports.