Sri Lanka has recorded its highest ever Foreign Direct Investment (FDI) inflows in 2017 amounting to US$ 1.913 billion rising by a sharp 138% compared to inflows of US$ 802 million in 2016, the Central Bank confirmed on Friday.
Releasing the External Sector Performance statistics for January 2018, the Central Bank said the FDI figure includes foreign loans to Board of Investment (BOI) companies in 2017 and direct investments in the Colombo Stock Exchange.
At the end of January, the BOI, the agency tasked with promoting and facilitating FDI, had stated that Sri Lanka’s FDI, according to their records, grew by a provisional US$1.63bn in 2017, with solid growth witnessed across key sectors.
The infrastructure sector saw the maximum FDI inflow of 61%, while investments into the manufacturing sector comprising 20% and 19% in services. The highest FDI came from China, followed by Hong Kong, India and Singapore.
“There are some investments that are not under the purview of the BOI. Hence, the balance US$283 million taken into account by the Central Bank, belongs to other investments which are not under the purview of the BOI,” said Director of Media and Publicity, Dilip Samarasinghe explaining the reason for the upward revision.
With the new Inland Revenue Act providing accelerated investment allowances over and above normal depreciation (until companies recover their total fixed investment) and the Foreign Exchange Act improving the investment climate, Sri Lanka is targeting to achieve US$2.5bn in FDI in 2018.
In the medium term, the BOI aims at attracting US$5 billion in FDI by 2020 as work on developing several new export promotion zones including Milleniya, Bingiriya, Weligama and Mawathagama has been initiated.
Meanwhile, the Central Bank on Friday said the number of tourist arrivals in January this year, increased by 8.9% recording the second highest number of arrivals in a given month. The number of tourist arrivals during the month was 238,924 in comparison to the highest monthly arrival of 244,536 in December 2017.
On the other hand, the financial account of the Balance of Payments (BOP) continued to experience higher inflows in January 2018, with foreign investments in the government securities market topping US$5.7 billion and the Colombo Stock Exchange recording US$ 279 million.
At the end of January 2018, gross official reserves of the country amounted to US dollars 7.7 billion, equivalent to 4.3 months of imports while workers’ remittances grew by 8.8 per cent, year-on-year, to US dollars 729 million in January 2018 compared to US dollars 670 million in January 2017.