External sector shows signs of revival

Monday, 28 August 2017 00:15 - - {{hitsCtrl.values.hits}}

The Central Bank on Friday said Sri Lanka’s external sector showed signs of revival with a significantly improved trade balance and continuous inflows to the government securities market in June 2017.

It said a substantial growth in industrial and agricultural exports and a decline in the importation of consumer and intermediate goods resulted in a notable improvement in the trade balance in June 2017. Inflows to the financial account were characterised by steady inflows to the government securities market while foreign investment in the Colombo Stock Exchange (CSE) also remained positive during the month.

Other major receipts to the current account remained moderate with the decline in workers’ remittances while tourist earnings recorded a modest growth. The positive developments in the financial account and gradual increase in export proceeds stabilised the foreign exchange market and resulted in an increase in gross official reserves by end June 2017 compared to the beginning of the year.

Trade deficit in June contracted year-on-year by 28.5% to $ 554 million although cumulative first half deficit rose by 13% to $ 4.75 billion.

The overall BOP is estimated to have recorded a surplus of $ 1,563.4 million during the first half of 2017 in comparison to a deficit of $ 1,186.1 million recorded during the corresponding period of 2016.