Sri Lanka Sees Increased Worker Remittances upto July

06th October 2010, www.dailynews.lk

During the first seven months of 2010, workers' remittances have increased by 12.5 percent over that of the corresponding period of 2009 to US dollars 2,141 million. The gross official reserves, without Asian Clearing Union (ACU) funds increased to US dollars 5,467 million by end of July 2010. Based on the previous 12 months average expenditure on imports of US dollars 1,021 million per month, the gross official reserves, without ACU funds were the equivalent of 5.4 months of imports, the Central Bank said yesterday.

Earnings from exports rose to US dollars 656 million reflecting a growth of 0.6 percent in July 2010. Earnings from agricultural exports performed well, while earnings from industrial exports declined marginally, the Central Bank said.

Expenditure on imports increased by 25.3 percent to US dollars 1,177 million in July 2010 reflecting increases in all major categories of imports. The cumulative earnings from exports and expenditure on imports have increased by 11.4 per cent and 39.2 percent, respectively, during the first seven months of 2010. The trade deficit expanded to US dollars 3,364 million during this period.

The increase in earnings from agricultural exports is attributed mainly to the healthy performances by the tea and minor agricultural export sectors.

Year-on-year, tea exports volumes grew by 6.1 percent to 28.8 million kilograms in July 2010 while the average export price of tea increased by 1.4 percent to US dollars 4.19 per kg.

Earnings from minor agricultural exports grew by 17.7 per cent mainly due to significant increases in the export volumes of sesame seeds, pepper, vegetables and cloves and the higher prices fetched by essential oils, cardamoms and cinnamon.

Lower rubber production due to unfavourable weather conditions amidst higher international demand for natural rubber led export prices of rubber to increase by 84.4 percent to US dollars 3.28 per kg.

Although rubber export volumes declined by 46.0 percent in July 2010, exports of rubber based products have increased substantially, reflecting higher levels of domestic value addition. Other key categories of industrial exports, such as machinery and equipment and petroleum based products also performed well in July 2010. Nevertheless, earnings from industrial exports declined marginally to US dollars 483 million in July 2010.

Expenditure on imports of consumer goods increased significantly during the month of July 2010, led by higher imports of non-food consumer goods, of which nearly 45 per cent comprised of motor vehicles.

Food imports also increased mainly due to the higher prices of sugar imports. However, expenditure on rice imports declined in view of the lower prices in the international markets and the bountiful crop from the Yala season.

Expenditure on intermediate goods also increased, led by higher imports of fertilizer, mainly due to the substantially higher import volumes of fertilizer amidst lower prices.

Expenditure on investment goods increased owing to the significant increases in expenditure on transport equipment, of which around 55 percent comprised of an aircraft imported in July 2010.