COLOMBO: Sri Lanka’s exports rose 14.1 percent from a year earlier to 976 million US dollars in October 2017, helped by strong demand from the US and higher prices for agricultural products, while slowing economic growth and credit has slowed import.
Apparel exports to the US rose 14.7 percent while exports to the EU was up 8.0 percent, with the help of GSP+ facility, the central bank said. The US economy had been recovering and the Federal Reserve is already raising rates.
There was also strong demand rubber tyres. Tea exports had risen 13.3 percent with the average tea export price up 13.3 percent and volumes up 11.3 percent. Seafood export had risen 145 percent to the EU market.
Earnings from coconut had fallen with lower production due to drought. In October, the US, UK, India, Italy and Germany were the top markets for Sri Lanka’s exports. In the first 10 months of the year, exports were up 8.8 percent to 9,399.7 million US dollars.
Imports grew only 0.2 percent to 1,727.2 million US dollars in October from a year earlier with foreign reserve collections and slowing credit putting the brakes on economic activity.
Machinery and equipment imports fell 12 percent to 392.5 million US dollars. Intermediate gods imports rose 5.5 percent to 948.4 million US dollars, with fuel imports down 6.6 percent to 236.9 million US dollar. Earlier in the year a drought boosted fuel imports for power generation.
Wheat and maize imports were up 62.4 percent to 31.1 million US dollars and fertilizer imports were up 95 percent to 10.6 million US dollars.
Consumer goods imports were up 1.3 percent to 382.2 million US dollars. Non-food consumer goods were up 7.3 percent to 233.3 million US dollars. Vehicles imports were down 15.2 percent to 54.8 percent. The trade gap narrowed to 752 million US dollars in October 2017 from 868 million US dollars last year.
Up to October imports were up 8.7 percent to 16.99 billion US dollars and the trade gap was up 2.7 percent to 2,924 million US dollars. Sri Lanka is now recovering from a balance of payments crisis generated in 2015 with large deficit budget which was accommodated by the central bank with money printing.
When credit slows and foreign reserves are collected imports, and economic activity can slow or contract, though returning capital can help mitigate the pain.
Sri Lanka’s gross official reserves had risen to 7.5 billion US dollars by October 2017, with a 2.0 billion surplus in the balance of payments, the central bank said.
