Tourism sector attracts major part:

FDI inflows up $ 205m in 2011

by Uditha KUMARASINGHE

Foreign Direct Investments (FDIs), including loans realised during the first half of 2011 had increased to US$ 413 million compared to US$ 208 million in the corresponding period of 2010.

According to the report on “Recent Economic Developments” by the Central Bank of Sri Lanka, the FDI which declined during 2009 and 2010 due to the impact of the global financial crisis on foreign financial inflows, increased during the first half of 2011.

The largest part of FDI inflows was attracted by the tourism sector, especially hotel and shopping complex projects.

In terms of country-wise data, the highest FDI inflow amounting to US$ 135 million was from Mauritius followed by US$ 66 million and US$ 47 million from Hong Kong and India during the first half of 2011.

FDI inflows, excluding loans, during the first half of 2011 also increased to US$ 378 million from US$ 178 million in the corresponding period of 2010, the report said.

The value of outward FDI amounted to US$ 25 million during the first half of 2011. The value of investment commitment of the contracted projects increased in the first half of 2011 compared to the corresponding period of 2010, indicating the future prospects of the realisation of new FDIs.

Meanwhile, inflows to the private sector increased to US$ 71 million in the first half of 2011 from US$ 60 million in the corresponding period of 2010.

The exchange control relaxation measures which enabled the private sector to borrow from foreign sources resulted in 14 private companies obtaining foreign loans amounting to US$ 197 million by mid September 2011 while the permission granted for foreign companies to open places of business resulted in 20 new foreign companies commencing business in Sri Lanka in the first nine months of 2011.