Sri Lanka’s exports sector succeeds to sustain growth momentum amidst crisis
Daily FT: The export sector remains the silver lining amidst the multiple challenges, as it maintained the growth momentum year-to-date (YTD) up 9.7% to $ 5.1 billion in the first five months of this year.
The surpassing of $ 5 billion mark was possible with May merchandised exports amounting $ 980.2 million, up 10% year on year (YoY) and higher than $ 915.3 million in April. However the $ 1 billion mark remains elusive for the second consecutive month.
As per provisional data released by the Export Development Board (EDB), May merchandised exports grew mainly due to the increase in earnings from apparel and textiles, coconut-based products and electrical and electronic components.
EDB estimated services exports from January to May were at $ 1.47 billion, up by 93.3% from a year earlier. The services exports estimated by EDB consists of ICT/BPM, construction, financial services and transport and logistics.
In 2021, Sri Lanka’s total exports recorded $ 15.12 billion, up by 23% from 2020 sustaining its resilience, despite an unprecedented economic crisis. Last year’s performance comes second only to $ 15.91 billion recorded in 2018. The Government is banking on exports, the only hope that can pull Sri Lanka out of the vicious cycle of the current account and put it back on a sound economic growth path. The Government has assured more support to exporters to reach a $ 20 billion target this year.
Product sectors except spices and concentrates, tea and rubber-based products; major export items like apparel and textiles, coconut-based products, EEC components and food and beverages, seafood and ornamental fish drove the increased export earnings in May.
Exports of apparel and textiles increased to $ 482.7 million, up by 30.1% YoY in April 2022. The increase was driven by both apparel and textiles.
On monthly analysis, export earnings of kernel products, fiber products and shell products categorised under the coconut-based products increased by 5.37%, 4.93% and 12.97% respectively in May 2022 compared to May 2021.
Export earnings from seafood increased by 11.8% to $ 16.8 million in May 2022 compared to the same period a year earlier. The expansion was contributed mainly by higher exports of fresh fish (4.9%) and shrimps (90.74%).
Ornamental fish exports earnings also increased by 41.1% to $ 1.3 million in May 2022 compared to the same period last year.
The electrical and electronics components (EEC) increased by 18.8% YoY to $ 41.8 million in May 2022 with strong performance in exports of insulated wires and cables (18.78%) and electrical transformers (16.5%).
OSL take:
Sri Lanka’s exports sector has managed to record a growth as well as profits through the years, even amidst the pandemic challenges as well as the ongoing crisis situation. The many trade agreements and trade concessions enjoyed by the country have also helped boost Sri Lanka’s exports sector. The Government of Sri Lanka has also introduced many incentives to further promote and expand the local exports industry. Given the resilience, continued growth and the business potential of the sector, foreign businesses/investors could confidently explore opportunities in Sri Lanka’s exports industry. They could also look at forming partnerships or joint ventures with local businesses engaged in the exports industry to expand operations locally and even internationally using Sri Lanka’s trade ties.
| Article Code : | VBS/AT/11072022/X_2 |