Sri Lanka’s external sector records further stabilization
Sri Lanka’s external sector has stabilised further in June 2020, with the gradual normalisation of domestic economic activity, the state owned, Daily News has reported.
A report in the Daily News has noted that the trade deficit had declined in June 2020 (year-on-year), with a more than expected rebound in merchandise exports and notable reduction in merchandise imports on account of restrictions on non essential imports.
Workers’ remittances recorded a growth in June, for the first time since the outbreak of the COVID-19 pandemic. During the month, both the government securities market and the Colombo Stock Exchange (CSE) recorded some outflows. Supported by the reduction in the trade deficit, the Sri Lankan rupee recorded a marginal appreciation during June 2020.
Earnings from merchandise exports had rebounded sharply, recording US$ 894 million in June 2020 compared to US$ 587 million recorded in May 2020.
The gradual resumption of economic activities of the country as well as the recovery of both domestic and global supply and demand chains to some extent had contributed to this improvement, the report stated.
The earnings from textiles and garments exports had reportedly led the increase from May 2020 to June 2020, followed by rubber products, food beverages and tobacco, seafood and spices.
OSL take:
The further stabilisation of Sri Lanka’s external sector is indicative of the strength, resilience and growth potential of the country’s economy. Also, Sri Lanka’s geographical positioning in the Indian Ocean, ease of doing business environment and the many trade agreements as well as trade concessions enjoyed by the country have added to the island’s ability to grow as a business/investment destination in the South Asian region. Therefore, businesses/investors could therefore explore business/investment opportunities in Sri Lanka.
| Article Code : | VBS/AT/31082020/Z_4 |