By: Staff Writer
Colombo (LNW): Sri Lanka’s external sector performance was stabilizing in the first five months of this year as the trade deficit narrowed while workers’ remittances tourism earnings and the balance of payments improved.
The Central Bank of Sri Lanka (CBSL) notes that the value of the rupee has been appreciated while gross official reserves stood at US$ 3.5 billion.
Inflows from workers’ remittances increased significantly by 75.7 percent, earnings from tourism grew by 30.4 percent whereas; total exports contracted by 7.7 percent; total imports declined by 22.8 percent; trade deficit narrowed to $1,926.0 million; and gross official reserves stood at USD 3.5billion.
The earnings from exports dropped by 7.7 percent or $ 407.7 million to $ 4,865.7million in the first five months of 2023, compared to$ 5,273.4 million in the same period of 2022.
Similarly, expenditure on imports declined by 22.8 percent or $ 2,010.3 million to $ 6,791.4 million in the first five months of 2023, compared to$ 8,801.7 million in the same period of 2022
The workers’ remittances grew significantly by 75.7 percent or$ 1,011 million to $2,347 million in the first five months of 2023, compared to $ 1,336 million in the same period of 2022.
This was mainly due to large remittance inflows with notable increase in migration of Sri Lankan workers sincethe latter part of 2022 and several policy measures including incentive schemes undertaken by the CBSL together with the Government to encourage migrant workers to use official channels to repatriate their remittances.
Earnings from tourism increased by 30.4 percent to $ 828.0 million in the first five months of 2023, compared to $635.0 million recorded in the same period of 2022 due to the continued recovery in the globaltourism.
Tourist arrivals grew to 524,486 in the first five months of 2023 compared to 378,521 in the same period of 2022. Mosttourists arrived from Russia, India, the United Kingdom, Germany, and France during this period.
The Colombo Stock Exchange (CSE) recorded a significant decline in net inflow of $ 3 million in the first five months of 2023, compared to$ 92 million in the same period of 2022.
In contrast, gross inflows to the government securities market increased notably to $ 398 million in the first five months of 2023 from $ 9 million in the same period of 2022.
Meanwhile, the gross official reserves stood at $ 3.5 billion as at end May 2023 including the swap facility of $1.4 billion (equivalent) from People’s bank of China. The overall Balance of Payments (BoP) recorded a surplus of $1,597 million by end of May, 2023 compared to deficit of $2,595 million in the same period of 2022.
The Sri Lankan rupee appreciated significantly by17.6 percent against the USD by the end of June 28, 2023.
