Sri Lankan exports in August 2010 rose by 7% to $760 million, the highest monthly earning so far this year – and was mainly due to a rise in exports of machinery and equipment, the Central Bank said this week.
It said, “the largest contribution to the growth in exports in August was from the industrial sector, led by a significant increase in exports of machinery and equipment. This comprised mainly of transport equipment such as boats and bicycles and electrical equipment such as electrical transformers, static converters, inductors and insulated cables.”
Cumulative earnings from exports during the first eight months of 2010 increased by 11% to $5,040 million compared to the corresponding period of 2009. Expenditure on imports increased by 36 % to $1,143 million in August 2010 reflecting substantial increases in all major categories of imports. Cumulative expenditure on imports during the first eight months of 2010 increased by 37% to $8,670 million compared to the corresponding period of 2009. As a result, the trade deficit expanded to $3,630 million during this period from $1,782 million in the corresponding period of 2009, the Bank said.
Earnings from exports of rubber products and petroleum products have also performed well. However, earnings from exports of food and beverages, textiles and garments, diamond and jewellery and other industrial products declined on a year-on-year basis. At $309 million, earnings from the textiles and garments sector recorded the highest earnings thus far, during the year.
Expenditure on imports increased due to higher demand across all three major categories of imports in August 2010. Textile and clothing imports, which are used as an input for apparel exports, increased by 27 % to $152 million in August 2010, reflecting the potential growth in apparel exports in the coming months. The average import price of crude oil increased by 9 % to $73.53 per barrel in August 2010, from $67.52 per barrel in August 2009.
During the first eight months of 2010, workers’ remittances increased by 12.9 % to $2,479 million over that of the corresponding period of 2009. Including the proceeds of the Sovereign Bond issued in September 2010, the gross official reserves, (without Asian Clearing Union (ACU) funds) increased to $6.8 billion by October 25. Based on the previous 12 months average expenditure on imports of $1,070 million per month, the gross official reserves, without ACU funds, were equivalent to 6.4 months of imports. “Considering the Central Bank’s aim of maintaining a foreign exchange reserve level equivalent to around five months of imports, the quantum of the current reserve is substantially over the planned level,” the statement said.