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As Sri Lanka battles the third wave of the Co-vid 19 pandemic the governor of the Central Bank of Sri Lanka states that the impact of the new wave may not affect the economy as severely compared to the previous two waves. This assessment is due to the increase in vaccination programs and the implementation of selective lockdowns along with the fact that workers have now gotten used to working from home.
However according to the recent statistics released by the Export Development Board the amount of Sri Lankan exports fell in April 2021 to record a 5 month low. The decrease in exports may be due to a reduction in demand of Sri Lankan exports and comes after an impressive YoY growth of 183% recording $798.8 million. The stats in April are the lowest since November 2020 when the government was battling the second wave and is the same as April 2019 when the nation was rocked by the Easter Sunday Terrorist attacks. The drop has disrupted the state tax revenues and expenses.
While the Apparels sector contributed 45.7% to the merchandise export basket the Tea export YoY value grew by 1.14% to record $79.26 million which is mainly contributed to the steady demand in the Chinese, UAE and Libyan markets, despite the YoY growth the sector saw a MoM decrease of 26.3% in April.
With the growing demand for rubber gloves and other sanitary related products the rubber and rubber finished products industry experienced a growth of 151.22% ($64.74 million) in March of 2021 and recorded a MoM growth valued at $35.06 million. The sector collectively contributed for $129.09 million in the first four months of 2021.
Diamond, Gems and Jewellery sector was noted as the fastest growing export category with an unprecedented YoY growth of 2544.76% recording $27.77 million. The values are considered as an indication of the strong recovery of the sector which only managed to record a modest $1.05 million the previous year.
With the increase in demand for spices such as cinnamon, pepper and cloves the Spices and Essential oils export grew to record a YoY increase of 85.77% valuing $22.46 million. The electric and electronic components sector also showed significant growth in YoY export values with an increase of 186.05% to record $27.06 million.
However the growth experienced by the other sectors was not reciprocated in the vegetables and petroleum sectors as their exports showed major declines.
The United States maintains its position as the single largest market for Sri Lankan exports totalling 27.5% of all Sri Lankan exports while the European Union (excluding UK) remains the largest market for Sri Lankan made goods.
Canada has become the fastest growing market for Sri Lankan exports. Furthermore the export levels for UK and India have also recovered.
Despite the third wave affecting exports investment continues to be carried out in the Island as the government is looking into various alternatives to bolster the economy. Recent developments include the currency swap with an a $500 million loan from the People Bank of China as well as parliament passing the Colombo Port City Economic Commission Bill which included the amendments made by the Supreme Court.
