Sri Lanka Cumulative export earnings show a growth as opposed to 2020

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By : Nalin Jayetileke 

Cumulative export earnings from January to June 2021 has amounted to US dollars 5,699 million, compared to US dollars 4,413 million recorded in the corresponding period in 2020 and US dollars 5,999 million recorded in the corresponding period in 2019 according to reports issued by the central bank of Sri Lana in mid Aug . Accordingly, Exports too have  shown an improvement by 12.9 per cent in June 2021 over May 2021.

Earnings from the export of industrial goods are seen as increased by 16.6 per cent in June
2021 compared to June 2020, with a broad-based increase in export earnings under most of the categories. Substantial increases were noted with respect to rubber products (tyres and gloves),petroleum products, machinery and mechanical appliances (all subcategories), textiles and garments, gems, diamonds and jewellery, and base metals and articles.

Increase in earnings from petroleum products are said to be due to the increase in unit values of bunker fuel along with some improvement in quantities supplied. Despite the ongoing pandemic related disruptions, the main export segments also is seen as recording an increased in earnings on a month-on-month basis. According to the report, total earnings from industrial exports from January to June 2021 amounted to US dollars 4,408 million with a growth of 31.3 per cent from the same period in 2020.

It has been reveled that earnings from the export of agricultural goods in June 2021 remained somewhat in the same region as in june 2020 whilst earnings from tea exports has shown an increase due to improvement in export volumes. Export unit values volumes however, seen a decline. Further, earnings from exports of coconut, spices and
unmanufactured tobacco increased. In contrast however, it has been reported that there  was a decline in export earnings from seafood, minor agricultural products (fruits, arecanuts, betel leaves, etc.) and vegetables (fresh, frozen, dried, preserved, etc.).

However, the total earnings from agricultural exports during the first half of 2021 has amounted to US dollars 1,259 million, with a growth of 21.2 per cent from the same period in 2020.

Earnings from mineral exports too are seen as higher despite the Covid situation with an
increases in earnings from earths and stone as well as ores, slag and ash, totaling to US dollars 25 million.

With the economic situation in the country during this period, it can be concluded that These indicate that the increase in import expenditure, on a year-on-year basis, was attributable to the combined impact of higher import volumes and prices. Expenditure on non-food consumer goods, especially Pharmaceuticals and Vaccines have increased
significantly and have been unavoidable. Situation being so workers’ remittances in June 2021 remained higher than the US dollars 460 million recorded in May 2021.

This is a norther positive as lately the Sri Lankan workforce which had their jobs over seas have started to now move out again with the Covid restrictions and vaccinations been eased off/ Relaxed  in many countries and have structured them self in handling influx of people from over seas more than what we saw few months ago. Most countries were kind of grouping in the dark, struggling to map out a strategy in mitigating risks and getting about with their normal activity. Though things have not got back to normalcy, things have now being better structured so as to ensure a smooth processes by  most countries. UAE Opening it up for Sri Lanka can be sighted as an example with which we could see many taking up their Jobs again and going overs seas.

Movement of the Sri Lankan rupee against Selected Currencies
2021 (up to 13 Aug)

US dollar            -6.8%
Euro                   -2.3%
Pound sterling     -7.9%
Japanese yen      -0.1%
Australian dollar  -2.1% after being at +1.3 in 2019
Indian rupee       -5.4% after being at + 2.3 in 2019

Meanwhile the  economy of Sri Lanka has advanced by 4.3 percent year-on-year in the first quarter of 2021, following a 1.3 percent rise in the previous period according to the Central bank reports despite the pandemic which is seen a a positive sign in since the last quarter. . It was the fastest expansion since the last quarter of 2016, as the economy continued to carry out most of the business activities, even under the Covid-19 imposed restrictions amidst the second wave of Covid-19.

It has been evident that the expansion was mainly driven by agriculture (6.1 percent vs 1.3 percent in Q4) and industry (5.5 percent vs 1.3 percent), due to the fact that despite the occasional restrictions on the control of the virus, it has been allowed to engage in agricultural activities and to keep industrial establishments open and productive. The services sector also contributed positively to growth (3 percent vs 1.9 percent), despite continued weakness in tourism and entertainment related activities (-31.9 percent vs -49.1 percent)

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