Thursday Nov 21, 2024
Thursday Nov 21, 2024
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Services exports flew Sri Lanka’s flag high globally in 2023 with a strong rebound whilst shipment of goods lagged amidst challenges as per provisional data released yesterday.
As against a 6% decline in 2022, services exports last year shot up by 63% to surpass the $ 3 billion mark. Merchandised exports on the other hand, declined by 9.5% to $ 11.85 billion, statistics from the Export Development Board revealed.
Robust performance by the services sector helped Sri Lanka finish 2023 with $ 14.95 billion in total exports, down marginally by 0.39% from $ 14.99 billion in the previous year. The highest performance of total exports was $ 15.91 billion in 2018. However, 2023 performance was also far below the original target of $ 18.51 billion.
The services sector also beat the original forecast of $ 2.58 billion for 2023. Merchandise exports target was $ 16 billion.
The services exports estimated by EDB consist of ICT/BPM, construction, financial services, transport and logistics.
In 2023, the value of ICT exports is estimated to have increased by 13.2 % to $ 1.26 billion. Construction, and transport and logistics services exports are forecasted to have increased as well, according to the EDB.
Except for tea, spices and concentrates, Electrical And Electronic Components (EEC) and food and beverage, all the other key export sectors including apparel and textiles, rubber and rubber finished products, coconut and coconut-based products and seafood underperformed in 2023.
“We cannot estimate the numbers for 2024 amid the highly volatile internal and global scenario,” the EDB Chairman Dr. Kingsley Bernard told the Daily FT.
He said the EDB in collaboration with the Investment Promotion Ministry has obtained technical support from the International Trade Centre (ITC) based in Geneva to revisit its existing Export Strategic Plan – National Export Strategy (NES).
“The key focus for 2024 is on reviewing the existing NES to align it with contemporary market challenges and harness emerging opportunities to boost exports. The ITC has not yet informed final details regarding the targets but it will soon be announced,” Dr. Bernard added.
Following is a summary of 2023 export performance issued by the EDB.
a) Products and services with positive growth (Increases)
Earnings from export of tea, spices and concentrates, electronics and electronic components and food and beverages increased by 4.06 %, 7.42 %, 0.62 % and 0.37 % respectively during the period of January – December 2023 compared, in comparison to the corresponding period of 2022.
Earnings from export of Tea increased by 4.06 % to $ 1,390.9 million in the period of January to December 2023. This increase was mainly due to the strong performance in export of tea packets (10.95 %).
In addition, export earnings from Spices and Essential Oils increased y-o-y by 7.42 % to $ 397.78 million in the period of January to December 2023. This increase was due to the strong performance in exports of pepper (18.65 %), cloves (116.01 %) and nutmeg and mace (14.01 %).
Earnings from export of Electrical and Electronic Components (EEC) increased by 0.62 % to $ 486.66 million in the period of January to December 2023 compared to the corresponding period of 2022. This increase was due to the strong performance in exports of printed circuits (52.37 %), switches, boards and panels (3.78 %) and boilers/ piston engines/ pumps and vacuum pumps (639.88 %) in the period of January to December 2023 compared to the corresponding period of 2022.
Earnings from export of apparel and textile have decreased by 18.02 % to $ 4,864.53 million during the period of January to December 2023 compared to the same period in 2022. Further, earnings from export of Apparel declined by 19.01 % and export of textiles declined by 5.9 % in January to December 2023.
In addition, export earnings from rubber and rubber finished products decreased by 8.66 % to $ 930.24 million in January – December 2023 compared to the same period in 2022 attributed to declined exports of industrial and surgical gloves of rubber (-23.67 %) and pneumatic and retreated rubber tyres and tubes (-1.1 %).
Export earnings of Coconut and; Coconut based products decreased by 13.27 % to $ 708.7 million during January – December 2023 compared to last year. Earnings from all the major categories of coconut based products decreased in the period of January – December 2023 compared with the corresponding period of 2022 due to the poor performance in export of coconut oil (-10.93 %), desiccated coconut (-21.74 %), coconut milk powder (-4.11 %), coconut cream (-1.72 %), liquid coconut milk (-1.90 %), cocopeat (-14.82 %) and activated carbon (-15.5 %).
Further, export earnings from seafood decreased by 2.52 % to $ 262.24 million during the period of January to December 2023 compared to year 2022 due to the poor performance in frozen Fish (-4.74 %), shrimps (-21.58 %) and crabs (-21.22 %).
Sri Lanka’s export performance in major markets
Among the top 10 export markets of Sri Lanka, France has shown a strong performance in both the month of December 2023 as well as the period of January to December 2023 compared to the corresponding period in 2022. Furthermore, UAE and Italy have shown significant performance during the same period.
The United States of America remained a key export destination for Sri Lanka, absorbing 23% of Sri Lanka’s merchandise exports in 2023. Exports to the United States of America, Sri Lanka’s single largest export destination, decreased by 0.96 % to $ 253.74 million in December 2023 compared to November 2022. Further, exports to the United States of America decreased by 16.91 % to $ 2,758.57 million during the period of January to December 2023 compared to the same period in 2022.
Exports to FTA partners (India and Pakistan)
Exports to India and; Pakistan accounted for 7.2% of total merchandise exports decreased by 3.21 % to $ 904.39 million during the period of January to December 2023 compared to the corresponding period of previous year.
Exports to India and Pakistan decreased by 2.95% and 6.06% respectively during the period of January to December 2023 when compared with the corresponding period in 2022.
The negative export performance of India was driven by lower export of Animal feed (12.92%), while Pakistan’s negative performance was led by decreased export of sheet rubber and other articles of stones.
Exports to the European Union decreased by 10.75 % y-o-y to $ 2,711.93 million during the period of January to December 2023 compared to the corresponding period of previous year.
Exports to the top five EU markets were recorded as; Italy $ 679.05 million (increased by 6.07 %), Germany $ 587.4 million (decreased by 21.11 %), Netherlands $ 343.47 million (decreased by 19.8%), France $ 304.95 million (increased by 18.42%) and Belgium $ 221.45 million (decreased by 28.03%) during the year 2023 in comparison to 2022.
