Remittances and tourism earnings mainstays in the economy
View(s):According to the latest February 2024 data released by the Central Bank (CB), earnings from tourism in February were estimated at US$346 million, in comparison to $342 million for the previous month and $162 million for February 2023.
In the case of workers’ remittances, it amounted to $476 million in February in comparison to $407 million in February 2023 and slightly lower at $488 million in January 2024.
The CB statement said that the deficit in the merchandise trade account widened to $319 million in February 2024 from $39 million recorded in February 2023, mainly with a higher increase in imports than the increase in exports. Similarly, the cumulative deficit in the trade account during January to February 2024 also widened to $860 million from $484 million recorded over the same period in 2023.
Earnings from merchandise exports increased by 7.9 per cent to $1,059 million in February 2024 compared to $982 million in February 2023. An increase in earnings was observed in all major categories of exports, including industrial, agricultural, and mineral. Earnings from exports of agricultural goods improved in February 2024 compared to a year ago mainly driven by tea due to both higher export volumes and prices.
Expenditure on merchandise imports recorded an increase of 35 per cent to $1,378 million in February 2024 compared to a significantly lower base of $1,021 million in February 2023. This increase was a result of increases across all major import categories as a result of the relaxation of import restrictions, normalisation of economic activities and loosening monetary conditions. The increase in expenditure on consumer goods imports in February 2024 compared to a year ago was due to a broad-based increase in expenditure on both food and non-food consumer goods.
Sea transport, Air transport, and Computer and IT/BPO related services were the major contributors to the inflows to the services sector in February 2024. Total services sector inflows (excluding earnings from tourism) were estimated at $247 million in February 2024, in comparison to $242 million in February 2023.
Gross official reserves (GOR) stood at $4.5 billion by end February 2024. This included the swap facility from the People’s Bank of China (PBOC), equivalent to around US dollars 1.5 billion, which is subject to conditionalities on usability. Overall, the Central Bank purchased $240 million, on net basis, during the month of February 2024.
The Sri Lanka rupee appreciated by 7.6 per cent against the US dollar during the year up to March 28, 2024.
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