Export earnings increase in first seven months
Continuing the upward momentum observed during the first half of the
year, export earnings improved further in July 2014.
Expenditure on imports also recorded an increase in July 2014
compared to the decline recorded in the preceding three months.
A relatively higher increase in import expenditure resulted in a
higher trade deficit in July 2014 compared to July 2013.
However, inflow from worker remittances and tourism continued to
strengthen the current account further.
An increase of inflow to the financial account with other inflow
resulted in an estimated surplus of the balance of payments (BOP) for
the year upto July 2014 compared to the deficit recorded in the
corresponding period of 2013. The improved BOP position strengthened the
international reserves and stabilised the exchange rate further. Export
Performance Earnings from exports grew by 11.1 percent to US $ 955
million in July 2014 recording a cumulative growth of 15.9 percent
during the first seven months of 2014.
All major export categories contributed to the growth in exports,
while the largest contribution came from industrial exports. Reflecting
the impact of seasonal demand, textile and garment exports grew at a
higher rate while the exports of rubber products also increased, helped
by an enhanced level of exports of rubber tyres.
However, export earnings from bunkering and aviation fuel which
account for a major share in petroleum products declined due to lower
volume although an increase in prices was recorded.
This partly reflects the heightened competition in the industry from
major regional players such as India and Singapore. Further, exports
earnings from gems and diamonds declined, while jewellery exports
increased in July 2014.Earnings from agricultural exports rose mainly
due to enhanced performance in coconut and tea exports. The growth in
kernel product exports drove the increase in earnings on coconut
Meanwhile, earnings from tea exports recorded a healthy growth
supported by favourable prices despite declined volumes. Export earnings
from seafood and minor agricultural products also contributed
significantly to the growth in agricultural exports. However, in July
2014, earnings from rubber exports declined mainly due to adverse
weather conditions and
continuous drop in rubber prices in the international market, while
earnings from export of spices declined mainly due to lower production.
Expenditure on imports increased by 28.8 percent to US $ 1,845
million in July 2014 an increase in all major import categories, but
particularly in fuel. On a cumulative basis, expenditure on imports
increased by 2.9 percent during the first seven months of 2014.
Import expenditure on fuel increased by 93.3 percent, year-on-year,
to US dollars 516 million in July 2014 mainly due to the base effect of
non-importation of crude oil in July 2013 and 6.5 percent increase in
imports of refined petroleum products.Meanwhile, import expenditure on
base metals increased by 137.9 percent, year-on-year to US dollars 56
million mainly due to an increase in iron, steel and copper imports.