Sri Lanka’s external sector improved further with continued inflows being recorded in the Balance of Payments (BOP). Cumulative foreign exchange inflows to the country in the form of earnings from exports and tourism as well as workers’ remittances strengthened the current account of the BOP during the first eleven months of 2014.
This together with inflows to the financial account by way of foreign direct investments, inflows to the Colombo Stock Exchange (CSE) and private sector have supported the BOP to record a higher surplus, the Central Bank said.
Export earnings on a cumulative basis increased by 7.5 per cent (year-on-year) to US dollars 10.1 billion during the first eleven months of the year. However, earnings from exports declined by 10.7 per cent, year-on-year, to US dollars 921 million in November 2014.
The decline in the growth of exports in November 2014 was mainly due to the base effect as a substantial growth in export earnings was recorded in November 2013,the Bank said.
The decline in exports in November 2014 was largely due to decline in earnings from textiles and garments followed by rubber products and gems, diamonds and jewellery categorized under industrial exports. Earnings from textiles and garments exports declined by 14.4 per cent in November 2014 with the decline in garment exports to the EU and to the USA by 16.6 per cent and 17.8 per cent, respectively. Export earnings from rubber products declined mainly due to the decline in rubber tyre exports.
Export earnings from tea showed a moderate decline of 4.5 per cent mainly due to the lower prices despite higher volumes.
The leading markets for merchandise exports of Sri Lanka during the first eleven months of 2014 continued to be the USA, UK, Italy, India and Germany accounting for about 50 per cent of total exports.
Expenditure on imports increased moderately by 4.8 per cent year-on-year to US dollars 1,645 million in November 2014, while on a cumulative basis imports grew by 7.1 per cent to US dollars 17,618 million during the first eleven months of 2014.
The increase in import expenditure in November 2014 was mainly led by imports of consumer goods with significant increase in imports of personal motor vehicles such as motor cycles and motor cars as well as rice imports.
During the first eleven months of 2014, the main import origins continued to be India, China, UAE, Singapore and Japan accounting for about 59 per cent of total imports.