COLOMBO – (EconomyNext) – Sri Lanka’s exports rose 5.8 percent to 891.4 million US dollars, with apparel exports rising 6.0 percent to 419.9 million US dollars, and non-oil imports rose sharply, amidst a pick-up in domestic credit, official data show.
Apparel exports rose 6.0 percent to 419.9 million US dollars, petroleum exports rose 19.5 percent to 35.2 million US dollars driven by bunkers but rubber products fell 3.9 percent to 67.5 million US dollars with a fall in rubber tyres shipments, the Central Bank said.
Agricultural exports rose 0.8 percent with spice exports rising 84 percent to 30.9 million US dollars and coconut products rising 20 percent to 30.8 million US dollars.
Bu tea exports fell 6.2 percent to 108.4 million US dollars with weak demand from Russia while prices also fell.
Sri Lanka has a trade deficit because residents get dollars to spend from sources other than merchandise exports including remittances from exports of labour, tourism services.
The government is also usually a net exporter of debt, and is a key contributor to the trade deficit. However for all the inflows to be spent, credit has to be strong.
Excessive domestic credit, especially to the state for recurrent spending can boost consumption and imports to unsustainable levels.
In February 2015, total credit disbursed by the commercial banks rose to 124 billion rupees, with 24.5 billion rupees disbursed to private customers and the state borrowing 87.9 billion rupees, revering a contraction of 44 billion rupees a year earlier.
Though private credit was flat, state credit fell 25 billion rupees in February 2014 and state enterprises paid back 18.7 billion rupees of loans taken during the balance of payments crisis in 2011/2012.
Fuel imports fell 46 percent to 264.4 million US dollars.
Food and beverage imports rose 57.5 percent to 352.5 million US dollars in January 2015, with dairy products down 2.5 percent to 23.6 percent.
Non-food consumer goods rose 60.3 percent to 206.5 million US dollars with vehicles rising 36.4 percent to 58.8 million US dollars and other non-food consumables rising 100 percent to114.3 million US dollars.
Textile imports rose 38 percent to 211 million US dollars and chemical products rose 47 percent to 75.3 million US dollars. Spending on fertilizer fell 0.9 percent to 19.8 million US dollars. Rubber products rose 29 percent to 210.9 million US dollars.
Investments goods rose 23.8 percent to 362.3 million US dollars. Building materials rose 44.5 percent to 118.1 million US dollars and transport equipment rose 77 percent to 70.3 million US dollars.
Total imports rose 7.7 percent to 1,529.5 million US dollars in February 2015 from a year earlier, despite falling oil prices amid credit growth. The trade gap expanded 10.4 percent to 638.2 million US dollars.
Earnings from tourism was up 16.7 percent to 263.5 million US dollars, but worker remittances rose only 1.9 percent to 511.6 million US dollars. In the first two months of the year total remittances fell 2 percent to 1,035 million US dollars.
Inflows to the government was also down 24.9 percent to 160.6 million US dollars.
In the first two months of the year, exports were up 3.1 percent to 1,801 million US dollars, imports rose 4.4 percent to 3,211.2 billion US dollars and the trade gap expanded 6 percent to 1,410.0 million US dollars.