SL records highest monthly export value of USD 1.2 bn
Earnings from exports recorded the highest monthly export value in history in October 2021, while marking the fifth consecutive month of above US dollars 1 billion of export earnings. Such improvement in export earnings, along with improving conversions, is expected to strengthen foreign exchange inflows to the domestic foreign exchange market in the period ahead.
Surpassing the previous maximum recorded in March 2019 (US dollars 1,137 million), earnings from exports in October 2021 grew by 40.4 % over October 2020 to reach US dollars 1,200 million. Increases in earnings were observed in agricultural and industrial exports, while a marginal decline was recorded in mineral exports. Cumulative export earnings, which increased by 22.1 % during January-October 2021, amounted to US dollars 10,134 million, compared to US dollars 8,299 million recorded in the corresponding period in 2020.
Earnings from the export of industrial goods increased by 49.3% in October 2021, compared to October 2020. The major export segments, such as garments, food, beverages and tobacco, transport equipment, machinery and mechanical appliances, petroleum products and rubber products recorded substantial increases in earnings, while a decline in earnings was reported in the category of plastics and articles (mainly plastic clothing articles). Exports of garments to all major markets improved. Earnings from the export of petroleum products increased mainly due to the increase in bunker fuel exports, reflecting higher prices. Tyres and gloves led to increased export earnings from rubber products.
The import expenditure also recorded a y-o-y growth in October 2021.
Meanwhile the merchandise trade deficit, which has been falling on a month-on-month basis since May 2021, declined further to US dollars 495 million in October 2021.
Foreign investments in the government securities market and the Colombo Stock Exchange (CSE) recorded marginal net outflows during the month. Meanwhile, the weighted average spot exchange rate in the interbank market hovered around Rs. 201 per US dollar during the month. The deficit in the trade account narrowed to US dollars 495 million in October 2021, compared to the deficit of US dollars 509 million recorded in October 2020, and the same level recorded in September 2021. The cumulative deficit in the trade account widened during January to October 2021 to US dollars 6,498 million from US dollars 4,846 million in the corresponding period of 2020.
Total earnings from the export of agricultural goods in October 2021 increased by 14.3%, compared to October 2020.
Earnings from mineral exports decreased marginally in October 2021, compared to October 2020, due to lower earnings from earths and stone. Expenditure on the importation of consumer goods in October 2021 decreased by 7.1 per cent over October 2020, led by lower expenditure on food and beverages.
Expenditure on the importation of intermediate goods in October 2021 increased by 38.6 per cent over October 2020, driven by fuel, textiles and textile articles (mainly fabrics and yarn), wheat, base metals, and rubber and articles thereof. Expenditure on the importation of investment goods increased by 11.5 per cent in October 2021, compared to the same month in 2020.
Meanwhile, expenditure on transport equipment decreased, owing to lower expenditure on commercial vehicle imports. Workers’ remittances amounted to US dollars 317 million during October 2021, in comparison to US dollars 631 million in October 2020. On a cumulative basis, workers’ remittances during January-October 2021 amounted to US dollars 4,895 million, which is a decline of 13.8 per cent, over the same period in the previous year. Total departures for foreign employment recorded a growth of 28.2% to 15,733 during the month of October 2021.
Tourist arrivals continued to gather pace in recent months. Accordingly, tourist arrivals in October 2021 were recorded at 22,771, compared to 13,547 arrivals in September 2021. A total of 60,695 tourist arrivals were recorded during the ten months up to October 2021, compared to 507,311 arrivals in the corresponding period of 2020.
Earnings from tourism are estimated at US dollars 31 million in October 2021. A marginal net outflow of foreign investment was recorded in the government securities market in October 2021.
Meanwhile, the CSE recorded a net outflow of US dollars 7 million in October 2021, resulting in a net outflow of US dollars 222 million during the ten months up to October 2021.