SL records over US$ 2 b BOP surplus in 2017 | Sunday Observer

SL records over US$ 2 b BOP surplus in 2017

The significant expansion in import expenditure was largely driven by the expenditure on fuel. FILE PIC: LAKE HOUSE MEDIA LIBRARY
The significant expansion in import expenditure was largely driven by the expenditure on fuel. FILE PIC: LAKE HOUSE MEDIA LIBRARY

Sri Lanka’s external sector performance showed a significant improvement in the year 2017 with the Balance of Payments recording a surplus of US$2.068 billion in 2017 while gross official reserves of the country standing at a healthy US$ 8.0 billion at end 2017.

According to the Central Bank, export earnings recorded the historically highest value of US dollars 11.4 billion in 2017 mainly due to the notable increase in tea, textiles and garments, and petroleum products exports. In addition, spices and seafood exports also contributed towards the increase in exports during 2017.

Sri Lanka’s textiles and garments exports exceeded US$5 billion in 2017, up 3.0% from 2016 with earnings in the month of December alone up 19% while earnings from Sri Lanka’s sea food exports rose 42% to US$ 241 million in 2017 from a year ago, according to central bank data.

In December 2017, textiles and garments exports rose 19.4% to US$470 million in December 2017 from a year ago while seafood exports rose 23.5% to $21.5 million alone from the previous year.

“Earnings from seafood and minor agricultural products, particularly fruits and betel leaves, also contributed towards the enhanced export earnings” in December 2017, the Central Bank said.

The recovery in seafood exports followed the withdrawal of a ban on fisheries exports in June 2016.

Meanwhile, although earnings from exports increased at a higher rate, the increase in import expenditure resulted in widening the trade deficit in the year 2017 compared to 2016.

According to Central Bank data, cumulative trade deficit increased from US$8.8 billion in 2016 to US$9.6 billion in 2017 reflecting higher import expenditure caused by weather related factors, offsetting the notable increase in export earnings.

“Continued inflows by way of tourist earnings and workers’ remittances, however, have contributed in curtailing the expanded trade deficit to a certain extent. Improvement in short-term and long-term capital inflows continued during the month,” the Central Bank pointed out.

It added that the significant expansion in import expenditure was largely driven by the expenditure on fuel, owing to increased prices and import volumes of refined petroleum products and coal. Further, import expenditure on base metals also increased mainly due to higher imports of iron and steel.

Comments