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Monday April 15th, 2024

Sri Lanka 2021 imports surge to 20.6bn amid controls, forex ‘shortages

ECONOMYNEXT – Sri Lanka’s imports surged to 2.2 billion US dollars in December 2022 from around 1.6 to 1.7 billion US dollars in earlier months, while full year imports rose to 20.6 billion dollars, higher than the 19.9 billion US dollars in the pre-pandemic 2019.

In December imports rose 46.8 percent to 2.2 billion US dollars, exports rose 19 percent to 1.15 billion US dollars. There were also an estimated 120 million dollars of tourism revenues, which would also boost imports.

Exports in the 12-month to December 2021 were up 24 percent to 12.5 billion dollars

In the 12 months to December imports rose 28.5 percent to 20.6 billion US dollars as exports and credit recovered from pandemic lockdowns.

The trade deficit expanded to 8.1 billion dollars from 6.0 billion US dollars.

Sri Lanka curtailed imports, in a severe Mercantilist knee jerk reaction as money printing created forex shortages.

Imports surged despite vehicle imports, a perennial target of Mercantilists running the country coming down to 12.8 million US dollars, down from 815.7 million dollars in the pre-pandemic year of 2019.

Sri Lanka banned a series of goods which are disliked by bureaucrats but printed large volumes of money to keep interest rates down and boost investments.

Loans at 7.0 percent interest were given to housing.

Machinery and equipment imports rose to 2.8 billion dollars from 2.1 billion dollars a year earlier and 2.4 billion US dollars in 2019.

Building materials rose to 1.2 billion dollars from 1.0 billion a year earlier, though down form 1.5 billion in 2019.

Total capital goods imports were 4.4 billion US dollars up from 3.5 billion a year earlier. Some may be from fully financed foreign funded projects.

Food and beverages imports were 1.5 billion US dollars up from 1.55 billion dollars a year earlier.

Dairy imports were down 4.8 percent to 317 million US dollars, in a move that is likely to warm the cockles of Sri Lanka’s economic nationalists and so-called import substitution cronies, observers say.

However the fall in the car imports or milk had failed to reduce the countries balance of payments deficit or the trade deficit, which is driven by services incomes, foreign borrowings as well as money printing if there is any.

Comments (2)

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  1. B says:

    Please read article from beginning. We are still in Feb, 2022 and data is about December 2022😃. Ok it’s may be error. Another thing is some fibers giving US$ and next figure in SL Rs. I suggest to use a single currency for Viewers to better understand the statistics

  2. k.Wijesuriya says:

    This news says country has imported 2,2 billion USD in December
    But countries banks are not giving a single U.S Dollar for approved
    imports. Then how it happened.

    K.Wijesuriya

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Cancel reply

Your email address will not be published. Required fields are marked *

  1. B says:

    Please read article from beginning. We are still in Feb, 2022 and data is about December 2022😃. Ok it’s may be error. Another thing is some fibers giving US$ and next figure in SL Rs. I suggest to use a single currency for Viewers to better understand the statistics

  2. k.Wijesuriya says:

    This news says country has imported 2,2 billion USD in December
    But countries banks are not giving a single U.S Dollar for approved
    imports. Then how it happened.

    K.Wijesuriya

Sri Lanka to discuss two contentious points with bondholders: report

ECONOMYNEXT – Sri Lanka and sovereign bondholders are to discuss two matters in the near future which the two sides failed to reach agreement at March talks in London, a media report quoting a top aide to President Wickremesinghe as saying.

Sri Lanka and bondholders had discussed four matters on restructuring international sovereign bonds in late March and agreement had been reached on two, President’s Chief of Staff Sagala Ratnayake was quoted as saying on state-run ITN television.

A restructuring proposal by bondholders was not in line with IMF requirements, and Sri Lanka had sent a counter proposal, he said.

The matters will be discussed at round of talks in the near future.

Sri Lanka was optimistic of reaching an agreement with the bondholders before June, officials have said.

According to matters already in the public domain, sovereign bond holders are keen to get a bond tied to dollar gross domestic product, as they feel IMF growth projections are too low.

In past re-structuring so-called value recovery instruments, a type of warrant, gave their owners extra payments if a country did better than expected and were tied to items like oil prices.

Bondholders had initially proposed bond which would have a lower hair cut initially, and it will have additional hair cuts if growth is low (about 3.1 percent) as projected in an IMF debt sustainability analysis. (Colombo/Apr15/2024)

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BIMSTEC Secretary General visits Sri Lanka, discusses regional cooperation

ECONOMYNEXT – The Secretary General of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), discussed measures to enhance regional cooperation, during his visit to the island last week.

Ambassador Indra Mani Pandey, Secretary General of BIMSTEC visited Sri Lanka from 07 – 12 April 2024, following his assumption of office as Secretary General of BIMSTEC in January this year.

The Secretary General “met with senior officials of relevant Ministries/Agencies to discuss measures to enhance regional cooperation under various BIMSTEC initiatives,” the Foreign Ministry said in a statement.

Several BIMSTEC countries have bilateral trade agreements, such as Sri Lanka and India, Thailand and Myanmar, Sri Lanka and Thailand, but no collective regional agreement to enable intra-regional leverage.

During the visit, Secretary General Pandey held discussions with Ministry of Foreign Affairs officials and paid courtesy calls on the President and the Minister of Foreign Affairs.

Secretary General Pandey participated at an event on “Regional Cooperation through BIMSTEC” organized by the Lakshman Kadirgamar Institute (LKI) on 9 April. (Colombo/April15/2024)

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Sri Lanka rupee closes weaker at 299.00/10 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 299.00/10 to the US dollar in the spot forex market on Monday, from 298.50/55 on Wednesday, dealers said, while bond yields were broadly steady.

A bond maturing on 15.12.2026 closed stable at 11.30/35 percent.

A bond maturing on 15.09.2027 closed stable at 11.90/12.00 percent.

A bond maturing on 15.12.2028 closed at 12.10/20 percent up from 12.10/15 percent.

A bond maturing on 15.09.2029 closed stable at 12.20/40 percent. (Colombo/Apr15/2024)

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