Sri Lanka’s external sector performance improved substantially in 2013, with the country only missing out fractionally on achieving US$ 1 billion in exports for the third month running in December, according to official data.
The island nation’s Central Bank announced improvements across the board on the external front, with surging exports enabling the country to record an impressive balance of payment (BOP) surplus of US$ 991 million during 2013.
This was a significant increase from the initial estimates for the year, the Central Bank said and noted, “This was achieved despite the volatility in international financial markets which particularly affected emerging market economies in the region.”
Export earnings rose 13.2% in December 2013, while import expenditure rose fractionally – by 2.1%. Thereby, the trade deficit reduced considerably by 12.9% to US$ 565 million.
Earnings from exports during the month stood at US$ 986 million. Notably, both industrial and agricultural exports of the country increased during December 2013, according to the Central Bank.
Industrial exports (which account for over 75% of total earnings from exports) surged by 15.2% on an annual basis to US$ 741 million in December 2013, supported by increase in exports of textiles and garments. Agricultural exports also reported growth in export earnings by 11.4%, (on an annual basis) to US$ 242 million in December 2013, largely on the back of growth in tea exports.
The segments which reported higher export earnings included rubber products, leather, travel goods and footwear, plastics, chemical products, ceramic products, tea, coconuts and spices.
Negative growth in export earnings were reported by transport equipment, petroleum products and rubber.
With increase in imports of intermediate and consumer goods, the country’s expenditure on imports rose by 2.1% to US$ 1,551 million in December 2013.
Fuel importation costs continued to be an issue as costs recorded growth of 21.4% to US$ 454 million in December 2013. Similarly, spending on imports of chemical products, fertilizer and agricultural inputs also rose during the month.
By the end of the year (2013), the country’s gross official reserves were estimated at US$ 7.2 billion which are considered to be equivalent to approximately 4.5 months of imports. Sri Lanka’s total international reserves, amounted to US$ 8.3 billion up to end November 2013. The total reserves are estimated to be equivalent to approximately 5.4 months of imports.
In addition to improvements in figures, the Central Bank noted that Sri Lanka’s garment industry has improved backward linkages and is delivering higher value addition, by observing that despite increase in exports of garments, there has been a decline in textile imports to the country.