Dec 01, 2010 (LBO) - Sri Lanka's exports rose 16.7 percent to 662.9 million US dollars in September 2010, helped by higher commodity prices and a surge in apparel exports while imports grew at a faster 35.9 percent widening the trade gap, Central Bank data showed.
"While earnings from garment exports to the EU increased by 1.5 per cent, garment exports to the USA grew by 13.4 percent," the Central Bank said. "Earnings from agricultural exports also increased recording a healthy growth in all key sub-categories due to increases in both, volumes and prices."
The average price of tea was 4.31 US dollar per kilogram while rubber prices had risen 62.9 percent to 3.08 dollar per kilo.
The central bank said export to the EU has increased despite the loss of preferential trade benefits in August, while exports to the US had grown.
Imports grew 35.9 percent to 1,092 million US dollars. The central bank said 54 percent of non-food consumer goods was motor vehicles. Car imports surged after the state cut massive import duties.
Earlier only state workers who get tax slashed cars and lawmakers and other rulers who get tax free cars had the liberty to buy cars due to a discriminatory and oppressive tax system.
The oil bill rose 85.3 percent to 260 million US dollars machinery and equipment imports rose 58.2 percent to 106 million US dollars.
The September trade deficit rose 82 percent to 429 million US dollars.
In the nine months to September 2010, exports rose 11.4 percent to 5.7 billion US dollars and import rose 36.5 billion US dollars to 9.7 billion US dollars, doubling the trade deficit to 4.0 billion US dollars. Sri Lanka maintains a peg with the US dollar and its trade gap is driven by inflows outside the trade account which increase the purchasing power of domestic economic actors. The average price of tea was 4.31 US dollar per kilogram while rubber prices had risen 62.9 percent to 3.08 dollar per kilo.
The central bank said export to the EU has increased despite the loss of preferential trade benefits in August, while exports to the US had grown.
Imports grew 35.9 percent to 1,092 million US dollars. The central bank said 54 percent of non-food consumer goods was motor vehicles. Car imports surged after the state cut massive import duties.
Earlier only state workers who get tax slashed cars and lawmakers and other rulers who get tax free cars had the liberty to buy cars due to a discriminatory and oppressive tax system.
The oil bill rose 85.3 percent to 260 million US dollars machinery and equipment imports rose 58.2 percent to 106 million US dollars.
The September trade deficit rose 82 percent to 429 million US dollars.
In addition to exports, Sri Lankan expatriates remitted 2.4 billion US dollars home, helping increase incomes of domestic citizens.
The government also borrows abroad and runs a deficit budget, which help drive imports. The latest Treasury data showed that up to September 2010, a record 1.4 billion US dollars in foreign finance had been disbursed.
A widening trade gap is a sign of expanding economic activities. In 2009, economic activities and external trade collapsed causing a build up foreign reserves as bank lending contracted.
But credit growth has picked up and excess reserves in the banking system are being loaned to economic players.
The central bank said its reserves were at 6.7 billion rupees which is equal to 6.3 months of imports.
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