Export earnings increased significantly by 36% year-on-year (YoY) to US$ 834 million in November 2010. This is the highest monthly increase since October 2004, reflecting substantial increases in some of the relatively newer export categories such as boats, bicycles, electrical equipment, rubber products, petroleum products, food, beverages and tobacco.
Cumulative export earnings during the first 11 months of 2010 increased by 15.4% YoY to US$ 7,339 million reflecting one of the highest cumulative growth rates in the recent past.
Garment exports, which have been hit by the loss of the GSP+ duty free facility in exports allegedly due to human rights abuse by the Government, increased by 3.7% YoY to US$ 3,038.4 million.
Import expenditure increased by 19.1% to US$ 1,113 million in November 2010 mainly due to higher intermediate goods imports. Cumulative import expenditure during the first 11 months of 2010 increased by 32.6% YoY to US$ 12,083 million. As a result, the trade deficit expanded by 72% YoY to US$ 4,744 million during this period compared to US$ 2,753 million in the corresponding period of 2009.
The largest contribution to export earnings growth came from industrial exports, followed by agricultural exports. Industrial exports which accounted for 76% of total export earnings were led by textile and clothing exports. Garment export earnings to Sri Lanka’s major markets, EU and USA increased by 39.2% and 28.7% respectively in November 2010. from Machinery and equipment export earnings increased ”significantly” to US$ 67 million in November 2010. This comprised mainly transport equipment such as boats and bicycles and electrical equipment such as transformers, static converters, inductors, circuits and insulated cables.
Earnings from rubber and petroleum products and food, beverages and tobacco categories also contributed towards industrial export earnings growth in November 2010. Agricultural export earnings which accounted for 22.9% of total export earnings also grew, reflecting increases in export volumes and prices in all agricultural exports sub-sectors. Average export prices of tea and rubber remained high at US$ 4.55 per kg. and US$ 4.14 per kg respectively in November 2010.
Import expenditure increased, led by higher intermediate goods imports, particularly petroleum. Crude oil import price averaged at US$ 84.85 per barrel in November 2010 reflecting a 7.2% increase over US$ 79.18 per barrel in November 2009.
Consumer goods imports expenditure increased in November 2010 due to higher non-food consumer goods imports led by motor vehicles. However, food imports expenditure decreased mainly due to lower import volumes of rice, sugar and wheat grain, while milk products imports expenditure increased by 48.8% in November 2010 reflecting higher international prices due to global supply constraints. Imports of all sub categories of investment goods except transport equipment increased in November 2010.
During the first eleven months of 2010 workers’ remittances increased by 23.9% to US$ 3,761.9 million (after adjusting for revisions by commercial banks) over that of the corresponding period of 2009. Gross official reserves continued to remain above the targeted level and stood at US$ 6.6 billion by end December 2010 without Asian Clearing Union (ACU) funds. Based on the previous 12-month average import expenditure of US$ 1,108 million per month, gross official reserves without ACU funds were equivalent to six months of imports.
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