May 02, Colombo (LNW): The latest data released by the Central Bank reveals a notable surge in Sri Lanka’s export performance for March, with earnings reaching US $1,139 million, marking the highest figure since August 2022.
This growth trajectory underscores the resilience of the country’s exports, particularly in the textile and garment sector, which demonstrated renewed strength after a period of sluggishness.
Compared to the same period last year, March exports saw a significant uptick of 9.8 per cent, with a commendable 7.5 per cent increase from the previous month.
Despite facing challenges from the sustained appreciation of the rupee and relatively subdued growth conditions in Western markets, Sri Lanka’s export sector continues to forge ahead.
The appreciation of the rupee, surpassing 9.0 per cent year-to-date along with a 12 per cent increase last year against the dollar, has implications for both imports and domestic inflation.
While it contributes to softer inflation domestically, it poses a threat to exporters’ competitiveness abroad and diminishes their earnings upon conversion into rupees.
March’s export growth was broad-based, with textile and garment exports reaching US $444.9 million, marking a 6.6 per cent increase from the previous year and reaching the highest level since December 2022.
Petroleum product exports also surged, recording US $92.3 million, a robust growth of 134.6 per cent.
These sectors, along with industrial products, drove overall export growth by 11.7 per cent to US $912.2 million in March.
Additionally, food and beverage, tobacco, and rubber products exports recorded positive growth figures, further contributing to export performance.
On the import front, Sri Lanka imported goods worth US $1,507.7 million in March, reflecting a 4.0 per cent increase from the previous year and a 9.38 per cent rise from the previous month.
The surge in imports was primarily driven by fuel imports, which saw a notable increase of 18.2 per cent compared to the previous year.
Other import categories, including machinery and equipment, building materials, and food and beverage, also saw upticks, indicating increased spending on consumption and construction activities in an economy transitioning to normalcy.
While Sri Lanka recorded a trade deficit of US $369 million for March, reflecting a slight increase from the previous year, robust inflows from remittances, tourism, IT/BPO services, and freight services more than offset the deficit, providing stability to the economy amidst evolving trade dynamics.
