Textile and apparel exports boost external sector earnings
Textiles and apparel export earnings recorded a steady growth in June
this year, a Central Bank report revealed last week. The increase in
apparel export income had contributed to the growth in industrial export
earnings during the month.
Industrial income increased by 18.7 percent year-on-year, to US $ 725
million in June due to favourable performance in major export categories
such as textiles and garments, rubber products and leather products, the
Textiles and garment exports which account for 45.3 percent of
exports grew 25 percent, year-on-year, to US $ 446 million contributing
over 50 percent to overall growth in exports in June. The significant
increase in exports to traditional markets such as the EU increased by
34.6 percent and USA 12.1 percent and non traditional markets 44.5
percent contributed to the growth.
Apparel exporters said that the growth in the apparel industry
indicates the industry is poised to achieve the export target of US $ 5
billion by 2016.
An apparel exporter said that backward integration and promotion of
new Sri Lankan brands in the international market will help surpass the
goals set for the future.
The maintenance of safety and other international standards helped
the textile and garment industry in Sri Lanka to face strong competition
in international markets, the Central Bank report revealed, highlighting
further the growth in external sector which contributed to the decline
in the trade deficit.
It said that the decline in import expenditure on oil helped narrow
the deficit in June.
Inflow on account of workers’ remittances and earnings from tourism
also increased during the month, contributing to a further reduction in
the current account deficit.
These developments with continued inflow to the financial account
resulted in a healthy surplus in the balance of payments by end June
The cumulative trade deficit contracted by 20.1 percent, as a result
of a 16.8 percent growth in export earnings and a 1.2 percent decline in
import expenditure during the first half of 2014.
On a year-on-year basis, earnings from exports in June 2014 grew by
22.0 percent to US $ 986 million, while expenditure on imports declined
by 4.6 percent to US $ 1,439 million.
Accordingly, the trade deficit contracted for the ninth consecutive
month in June by 35.3 percent to US $ 454 million.
Expansion in all major export categories contributed to the growth in
exports in June, Central Bank sources said.
Industrial exports, which was the major contributor to export
earnings (64 percent) led the growth in overall exports, followed by
agricultural exports (36 percent).
Export of rubber products which is the second major contributor to
industrial exports grew by 11.1 percent to US $ 77 million in June 2014
mainly due to an increase in export of rubber tyres.
Although the continued decline in the international price of raw
rubber has had a negative effect on raw rubber exports, this has
benefitted domestic manufacturers of rubber products and encouraged
value added rubber exports.