Rishard paints positives in gloomy export performance

Despite strong external developments, 2012 first quarter exports fell only marginally but more importantly, Sri Lanka continued to record strong exports in March.

“Amidst strong external developments such as volatile global oil prices and global downturn, we reported only a marginal 1.4% export drop and were not greatly affected as many other countries but recorded $ 835.7 m in exports sector,” said Minister of Industry and Commerce Rishad Bathiudeen.

Minister Bathiudeen announced this on 30 May acknowledging the latest external sector performance data released by the Central Bank of Sri Lanka on the same day. The 2012 first quarter export data by the Central Bank showed a marginal 1.4% negative growth in exports (at $ 2.63 b) in comparison to 2011 first quarter (at $ 2.67 b).

“The depreciation of rupee that began after 2011 November Budget’s devaluation, followed by this February’s depreciation appear to have warded off a drastic export revenue fall that equally affected the South Asian region in March 2012 and could have possible saved us.  For instance, Indian year on year exports in March fell by 5.7%, Bangladesh’s exports in March fell by 7.23% while Pakistan’s year on year exports, according to their Bureau of Statistics, fell by 18.76% in March 2012. But Pakistan’s exports recovered in April,” Minister Bathiudeen revealed.

“Even though our own industrial exports fell due to lower earnings from exports of textiles and garments and petroleum products, we believe that our apparel export fall was due to the overall demand drop in our key markets of EU and US. The same pattern appears for other South Asian apparels too. But I believe these minor deviations would not affect our $ 12 b export target for 2012.”

Although Sri Lanka’s textiles and garments earnings declined by 11.7% in March 2012, it still continued to be the largest export earner with $ 319 m in March 2012.

“Impact of oil import costs and rising energy costs are affecting manufacturing bottom-line and as a result our international competitiveness could suffer,” Minister Bathiudeen cautioned.