Sri Lanka attempts to sustain economic growth

Sri Lanka attempts to sustain economic growth

21 October 2019 01:26 pm

Sri Lanka is attempting to sustain economic growth while maintaining macroeconomic stability with mixed performance in real, monetary and external sectors during the week ending Friday 18.

During the year up to 18 th October 2019 the Sri Lanka rupee appreciated against the US dollar (0.4%). The total outstanding market liquidity was a deficit of Rs. 2.048 bn by end of the week, compared to a deficit of Rs. 12.751 bn by the end of last week, Central Bank statistics showed.   

The reserve money increased compared to the previous week mainly due to the increase in currency in circulation and deposits held by the commercial banks with the Central Bank.

 Earnings from exports grew moderately by 2.4 per cent (year-on-year) to US dollars 8,031 mn during the first eight months of 2019 as a result of higher earnings from exports of textiles and garments (8.3%), rubber products (1.2%), transport equipment (32.3%), coconut (10.9%) and seafood (8.9%).

Import expenditure at US dollars 12,886 mn during the first eight months of 2019 decreased by 14.6 per cent (year-on-year) largely due to lower imports of gold (-99.6%), personal vehicles (-54.6%), rice (-92.3%) and fuel (-6.9%).

As a result, the deficit in the trade account contracted to US dollars 4,854 mn during the first eight months of 2019 from US dollars 7,240 mn in the corresponding period of 2018.

The export unit value index decreased by 3.2 per cent (year-on-year) in August 2019 mainly due to lower prices registered in agricultural and industrial exports.

The import unit value index in August 2019 decreased by 8.0 per cent (year-on-year) due to lower prices recorded in imports of intermediate and investment goods.

Accordingly, the terms of trade improved by 5.2 per cent (year-on-year) to 107.6 index points in August 2019.

The terms of trade improved by 5.2 per cent (year-on-year) to 107.6 index points in August 2019. The average price of tea (in the Colombo auction) decreased to US dollars 2.85 per kg in August 2019 from US dollars 3.34 per kg in August 2018.

The import price of sugar increased by 0.7 per cent in August 2019 (year-on-year), while import prices of rice, wheat and crude oil declined.