Sri Lanka exports up 5.4-pct in February, imports fall

DLanka Business Online

05/05/2014

Sri Lanka exports up 5.4-pct in February, imports fall

Sri Lanka's exports rose 5.4 percent in February 2014 from a year earlier, with apparel exports up 6.6 percent, while imports fell amid weak credit growth, official data showed.

In the first two months of the year exports were up 13.9 percent to 1,739 million US dollars, the Central Bank said.

Agricultural exports rose 15.3 percent to 201.2 million US dollars with tea up 11.7 percent to 115.6 million US dollars.

Textile and garment exports were up 6.6 percent to 396.2 million US dollars with export to the USA up 8.8 percent and to the EU up 8.7 percent.

Imports fell 6.2 percent to 1,344.7 million US dollars. Consumer goods rose 7.2 percent to 223.8 million US dollars and intermediate goods fell 4.7 percent to 827.4 million US dollars.

Fuel imports were a slight 0.6 percent up to 420.9 million US dollars.

Textile and textile articles were down 6.4 percent to 152.5 million US dollars despite higher apparel exports, which the central bank said was due to local manufacture of inputs.

Investment goods fell 17.7 percent to 292.6 million US dollars in February, with building materials down 21.8 percent to 81.8 million US dollars and transport equipment down 53 percent to 39.6 million US dollars.

The trade deficit contracted 20.7 percent to 503.7 million US dollars.

In the first two months of 2014, exports rose 13.9 percent to 1,739 million US dollars from a year earlier, imports rose just 1.1 percent to 2,998.6 million US dollars and the trade gap contracted 12.5 percent to 1,259 million US dollars.

Sri Lanka's trade deficit is triggered when foreign exchange earnings outside of exports such as through worker remittances, tourism or even foreign borrowings trigger imports.

High volumes of exports also trigger more imports when the proceeds are spent.

Imports usually fall when credit growth is weak and not all foreign receipts are spent within a given period, resulting is build ups of domestic liquidity and foreign reserves.

Sri Lanka's credit growth has slackened after a credit bubble fired a balance of payments crisis in 2011/2012. In February private credit fell in absolute terms.