External Sector Performance – August 2009
The trade deficit contracted for the eighth consecutive month in August 2009 by 76.9 per cent to US dollars 116 million, recording the third lowest trade deficit during the last five years. The cumulative trade deficit decreased by 59.6 per cent to US dollars 1,627 million during the
first eight months of 2009 from US dollars 4,032 million in the corresponding period of 2008. Workers’ remittances increased by 9.9 per cent to US dollars 2,195 million during this period. As a result, Workers’ remittances during the first eight months of 2009 were US dollars 568 million (about 35 per cent) in excess of the trade deficit.
Earnings from exports, which took on an increasing trend since April 2009, reached US dollars 710 million in August, recording the highest monthly value thus far in 2009. Although export earnings contracted by 6.7 per cent in August 2009 on a year-on-year basis, export earnings has taken on an increasing trend since April 2009.
Industrial exports declined by 6.0 per cent due to lower exports of petroleum products, diamonds and jewellery, rubber products and machinery and equipment. However, growth was recorded in the textiles and garments, food and beverages and other industrial exports subsectors. Textiles and garments exports rebounded by 8.5 per cent, year-on-year, recording US dollars 324 million in August 2009, recording the highest
earnings by the sector during the year.
With respect to agricultural exports, the tea sector performed well, reflecting a year-on year growth of 2.8 percent to US dollars 121 million in August 2009. Tea prices continued to fetch premium prices in the international market. The average export price of tea reached a record high of US dollars 4.34 per kilo in August 2009. However, agricultural exports, as a whole, which accounted for 23.7 per cent of total exports, declined by 7.4 per cent in August mainly due to the year-on-year declines in prices of rubber and most other agricultural products. Coconut exports too, declined in terms of prices as well as volumes, compared to August 2008. Although minor agricultural crop exports declined by 25.1 per cent in terms of export values (US dollars 25 million), they grew by 34.0 per cent in terms of volume, led by substantial increases in exports of cocoa products, sesame seeds and pepper. Mineral exports recorded a decline of 30.1 per cent, largely due to lower gem exports. Cumulative
earnings from exports during the first eight months of 2009, declined by 17.2 per cent to US dollars 4,551 million compared to the corresponding period of 2008.
Sri Lanka tea output down in September
Oct 22, 2009 (LBO) – Sri Lanka’s production of black tea in September 2009 fell three percent to 25.5 million kilos from a year ago, according to the Sri Lanka Tea Board’s statistics.
Tea production has been recovering from the effects of severe drought although annual output is unlikely to reach last year’s levels as the deficit is too big.
According to the Sri Lanka Tea Board, the shortfall in the September output came largely from teas in the high grown elevations, mainly by regional plantations corporations, with production of low grow teas mostly by small farmers increasing.
Production of high grown teas in the central hills in September was down 24.7 percent to 4.96 million kilos from a year ago.
High grown tea production was disrupted in September when labour unions staged a ‘go-slow’ that affected both cultivation and movement of made tea to back demands for higher pay.
Tea Board statistics also showed that production of low grown teas made mainly in the island’s south was up 5.6 percent to 16.8 million kilos in September 2009 from a year ago.
Medium grown tea production was marginally down at 3.7 million kilos in the month.
Sri Lanka gets $70mn from ADB for post-war road rebuilding
Oct 23, 2009 (LBO) – The Asian Development Bank said it has given financial assistance amounting to 70 million dollars to Sri Lanka for rebuilding roads in two provinces affected by war.
The total investment cost of the project in the island’s Eastern and North Central Provinces is 78 million dollars of which eight million will be contributed by the government of Sri Lanka.
The ADB said in a statement the project will rehabilitate 150 kilometres of provincial roads in the Eastern Province and 220 km of provincial roads in the North Central Province.
The proposed rehabilitation includes improvement of road pavements, bridges, drainage and replacement of culverts of the proposed roads.
“The project will contribute to the overall performance of the road sector in the Eastern Province and the North Central Province by improving transport efficiency and expanding access to economic opportunities and public services.”
The project is expected to be completed by 2013.
The Ministry of Local Government and Provincial Councils will be the executing agency of the project.
The implementing agencies are North Central Provincial Road Development Authority and Eastern Provincial Road Development Department under the respective Provincial Councils.