SL exports regain ground in May but sharp drop from May 2019

Sri Lanka’s export earnings in May 2020 fell sharply by 39 per cent to US$587million from $961 million in the same 2019 month, largely due to the impact on business arising out of the COVID-19 pandemic but it was a rebound from a dismal month for exports in April 2020.
Imports, according to the Central Bank’s trade data for May released on Monday, also fell sharply by 44.3 per cent to $994 million from $1,784 million in May 2019 largely due to import controls on several items.
The deficit in the trade account narrowed by $416 million in May to $407 million from $823 million in May 2019, as the decline in imports exceeded the decline in exports, the banking regulator said in a media release. 
It said the external sector showed signs of stabilisation, with the removal of most lockdown measures in the second week of May. The impact of restrictions on non-essential imports was observed in May with a notable reduction in merchandise imports. 
Workers’ remittances were significantly low in May compared to the same period in 2019, but recorded a notable increase compared to the extreme low levels recorded in April 2020. In relation to financial flows, the total exposure of foreign investment in the government securities market remained significantly low with a marginal outflow of government securities being recorded in May. 
With the resumption of trading in the Colombo Stock Exchange (CSE) in mid May 2020, there were some outflows of foreign investment. The Sri Lankan rupee stabilised, mainly aided by an improved trade deficit, recording an appreciation of 3.5 per cent during the month of May.

It said earnings from merchandise exports rebounded in May to $587 million, with the export sector gradually resuming activities following the relaxation of lockdown measures and the recovery of both domestic and global supply and demand chains to some extent. Earnings in May 2020 were more than twice the value recorded in April 2020. 
Led by a higher demand for personal protective equipment (PPE) such as face masks, protective suits, surgical gloves, etc, earnings from exports of other made up articles (categorised under textiles and garments) and surgical and other gloves (categorised under rubber products) grew significantly. 
The bank said that net outflows on account of long term loans to the government amounted to $313 million in May 2020, mainly due to the repayment of a syndicated loan of $333 million. (BS)