Sri Lanka exports 5.5-pct in Feb, imports strengthen
ECONOMYNEXT – Sri Lanka’s exports grew 5.5 percent from a year earlier to 915.7 million US dollars in February 2018, while imports grew 22.8 percent to 1.97 billion US dollars, pointing to an economic recovery.
Sri Lanka has more imports than exports because, people in the country earn dollars from remittances and tourism which tends to widen the trade deficit, without putting pressure on the currency.
Meanwhile foreign direct investment, foreign investments in the stock market and bonds and government borrowings abroad, when spent within the domestic economy will also widen the trade gap, generating a deficit in the current account.
However if the central bank prints money, domestic spending will exceed all inflows, and the rupee will tend to fall, even if there are large inflows.
Industrial exports grew 6.6 percent to 703.2 million US dollars, with textiles and apparel growing 2.8 percent to 407 million US dollars. Rubber products grew 5.4 percent to 68.3 million US dollars.
Agricultural exports grew 0.6 percent to 206.1 million US dollars with tea up 3.8 percent to 118.2 million US dollars, while rubber and coconut fell. Seafood exports grew 3.9 percent to 19.5 million US dollars.
Petroleum re-exports rose 56.7 percent to 67.2 million US dollars.
Data also showed that gold imports rose to 111.9 million US dollars, indicating they were probably re-exported as well to India unofficially for a hefty profit, though the numbers are not captured officially.
The finance ministry has since slapped a 15 percent tax on gold, showing the strong ideology of Mercantilism that grips Sri Lanka’s authorities and the weak grasp of economics.
Rice imports fell 34 percent to 23.5 million US dollars as domestic harvests came in. But consumer goods rose 28.7 percent probably pointing to an overall recovery in people’s incomes.
Non-food consumer goods rose 41.7 percent to 276.5 million US dollars, with vehicle imports rising 117 percent to 121.5 million US dollars.
Home appliances rose 26.4 percent to 28.4 million US dollars.
Intermediate goods imports rose 20.8 percent to 1,096.3 million US dollars with fuel imports down 11.1 percent to 315.2 million US dollars.
Fertilizer imports soared 126 percent to 20.3 million US dollars. Investment goods rose 5.6 percent to 380.5 million US dollars.
The trade gap in February widened to 1,072 million US dollars from 743 million dollars a year earlier. Tourism earnings were estimated at 437 million US dollars.
In the first two months, exports grew 8.6 percent to 1,881 million US dollars, imports grew 17.1 percent to 3,992 million US dollars and the trade balance expanded to 2.11 billion US dollars from 1.68 billion US dollars. (Colombo/May11/2018)