Business
Sizeable moderation in trade deficit – CBSL
External Sector Performance – February 2023
• Import expenditure declined notably, compared to the reduction in export earnings in February 2023 (y-o-y), resulting into sizeable moderation in the trade deficit.
• Workers’ remittances and earnings from tourism continued to improve in February 2023.
• Gross official reserves strengthened further by end February 2023, compared to recent months.
• The exchange rate appreciated notably in March 2023 following the greater flexibility that was allowed in the determination of the exchange rate.
• The Colombo Stock Exchange (CSE) and foreign investment in the government securities market recorded net inflows during February 2023.
• The Extended Fund Facility (EFF) from the International Monetary Fund (IMF) of US dollars 3 billion was approved and the first tranche was disbursed in March 2023.
The deficit in the merchandise trade account narrowed significantly to US dollars 39 million in February 2023, from US dollars 780 million in February 2022, mainly reflecting the impact of significant moderation of import expenditure due to subdued aggregate demand conditions. The cumulative deficit in the trade account during January-February 2023 was US dollars 449 million, a sizeable decline from US dollars 1,636 million recorded over the same period in 2022. The major contributory factors for this are shown in Figure 1.
Overall Exports: Despite recording a marginal growth compared to January 2023, earnings from merchandise exports declined by 10.2 per cent in February 2023, year-on-year, to US dollars 982 million. Exports earnings recorded below US dollar 1 billion level for the second consecutive month. While the decline in earnings was observed across all main categories, industrial exports mainly contributed to the overall contraction. Cumulative export earnings during January-February 2023 declined by 10.7 per cent over the same period in the last year.
Industrial Exports: Earnings from the exports of industrial goods declined in February 2023, compared to February 2022, with a substantial share of the decline being contributed by garments. Reduced demand from major markets for garments due to unfavourable economic conditions globally mainly contributed for this outcome. Earnings from rubber products continued to decline due to the lower exports of household rubber gloves. Similarly, earnings from the exports of petroleum products
1 The CBSL classification of exports and the classification of exports based on the Standard International Trade Classification Revision 4, are presented in Annex II and Annex III, respectively. also declined due to the drop in volumes of bunker and aviation fuel exports despite the higher aviation fuel prices. In contrast, earnings from machinery and mechanical appliances (mainly, electronic equipment); and gems, diamonds, and jewellery increased in February 2023.
Agricultural Exports: Earnings from the export of agricultural goods marginally declined in February 2023, compared to a year ago, since the increase in earnings from spices and tea was offset by the decline in earnings from coconut related products (primarily, fibres and desiccated coconut). Export earnings from spices improved due to higher export volumes of cloves; cinnamon; and nutmeg and mace. Increased earnings from tea exports were mainly due to price increases as the volumes registered a decline.
Mineral Exports: Earnings from mineral exports declined in February 2023, compared to February 2022, mainly due to the decline in exports of titanium ores.
Overall Imports: Expenditure on merchandise imports was almost halved in February 2023 at US dollars 1,021 million, compared to February 2022, recording the lowest imports since May 2020. All major import sectors declined while the decline in expenditure on intermediate goods was significant. Meanwhile, cumulative import expenditure during January-February 2023 also declined by 37.1 per cent over the corresponding period in 2022.
Consumer Goods: Expenditure on the importation of consumer goods declined in February 2023, compared to February 2022, driven by lower expenditure on both food and non-food consumer goods. Decline in expenditure on non-food consumer goods was broad-based but the drop in imports
2 The CBSL classification of imports and the classification of imports based on the Standard International Trade Classification Revision 4, are presented in Annex IV and Annex V, respectively.
Business
HNB partners IDEAL Motors to drive financial freedom through vehicle leasing solutions
HNB PLC, the leading private bank in Sri Lanka, has partnered with IDEAL Motors (Pvt) Limited to provide customers with attractive leasing solutions for brand-new vehicles & generators .
The partnership introduces a range of benefits designed to support individuals, entrepreneurs, and businesses seeking reliable vehicle and power solutions. Through this collaboration, customers can access structured lease facilities, special interest rates, free life insurance coverage, and attractive discounts through HNB General Insurance.
Commenting on the partnership, HNB, Senior Vice President/ Head of Retail Banking, Kanchana Karunagama, said, “At HNB, we believe that the right financial support can help people and businesses move forward with greater confidence. This partnership with IDEAL Motors shows our commitment to creating meaningful solutions that make vehicle and power investments more accessible, while helping our customers achieve their personal and business aspirations. By combining HNB’s financial expertise with IDEAL Motors’ industry capabilities, we are creating opportunities that support the ambitions of Sri Lankans and contribute towards a stronger, more connected economy.”
Customers purchasing vehicles through IDEAL Motors will also benefit from exclusive offers including free registration, and discounts on Bolero Maxx Pik-Up, Alfa Plus Load Carrier, Mahindra Pik-Up Single Cab, Mahindra Pik Up Double Cab, XUV 3XO vehicles, creating greater value throughout their ownership journey.
IDEAL Motors (Pvt) Limited, Director Legal and Corporate Affairs, Nimesha Welgama, said, “Our collaboration with HNB represents a shared commitment to supporting Sri Lankans in achieving greater financial independence through accessible ownership solutions. By combining IDEAL Motors’ mobility and power solutions with HNB’s financial expertise, we aim to empower individuals and businesses with opportunities that contribute to economic progress and community development. This partnership highlights our vision of creating lasting value by enabling customers to confidently invest in their future.”
With IDEAL Motors recognised for its diverse portfolio of automotive and power solutions, and HNB’s extensive expertise in financial services, the partnership aims to provide a seamless experience from selection to ownership, supported by flexible financing options and customer focused solutions.
The partnership further strengthens HNB’s commitment to supporting economic progress by providing financial solutions that enable customers to invest in personal mobility, commercial growth, and business continuity. Through collaborations with leading industry partners, HNB continues to expand opportunities for Sri Lankans while delivering a banking experience built around accessibility, trust, and value.
Business
Sri Lanka Insurance Corporation General and the Ministry of Education committed to protect Sri Lanka’s schoolchildren
Sri Lanka Insurance Corporation General Ltd (SLICGL) and the Ministry of Education, Higher Education and Vocational Education share a commitment to protect Sri Lanka’s children throughout their school education. The pledge is delivered through the Suraksha Student Insurance Scheme, which protects over 4 million school children.
The Government of Sri Lanka, through the Ministry of Education, Higher Education and Vocational Education, provides the Suraksha Student Insurance Scheme free of charge to schoolchildren throughout the country. SLICGL is proud to partner with the Ministry in delivering this national initiative, which helps safeguard students against the financial impact of unforeseen circumstances.
Eligible students include those aged 5-21 years in Grades 1-13 from government schools, government-approved private schools, and Pirivena education, as well as students aged 4-21 years in assisted special schools.
The scheme provides hospitalisation, outpatient and critical illness cover, as well as personal accident cover for permanent and temporary disability, together with a life insurance benefit for children from low-income families on the death of a parent. Cover applies to incidents within and outside school premises.
For a child, an illness or accident can be far more than a temporary setback. It can place added pressure on a family and, in some circumstances, disrupt schooling. Suraksha acts as a safety net, giving children and their families greater peace of mind and helping them stay in school despite life’s uncertainties. The scheme is easily accessible through SLICGL’s islandwide network of 200 branches and customer service centres.
Children’s Day is a celebration of hope, the hope for every child to have the opportunity to learn, grow and build a better future. Celebrating children also means protection, not for a single day but for every day they spend in the classroom.
Commemorating Children’s Day, SLICGL extended support towards the educational needs of children at an underprivileged school. The project highlighted the company’s belief in protecting the future not only by being supportive when the unexpected happens, but also in helping create an environment in which children can learn, grow and fulfil their potential.
As Sri Lanka’s National Insurer, SLICGL’s role goes further than protecting people against risk. It is also about contributing to a stronger, safer and more resilient country as children’s education, wellbeing and aspirations contribute directly to help build the journey ahead.
Business
Vietjet launches Hanoi to Prague route via Almaty, expanding to Central Asia and Europe
Vietjet, which already flies between Colombo and Ho Chi Minh City, has officially launched new services connecting Hanoi with Almaty, Kazakhstan, and Prague, Czech Republic, as well as Almaty with Prague, expanding its intercontinental network and marking its entry into the European Union. The new air links offer more affordable travel options while fostering greater tourism, trade and cultural exchange between Asia and Europe.
For Sri Lanka, the new routes widen the network that Vietjet is building out of Colombo. The airline has operated non-stop flights between Colombo and Ho Chi Minh City since August 2026, three times a week on Tuesdays, Thursdays and Saturdays, while its new Ho Chi Minh City to Maldives service via Colombo is scheduled to begin on 5 December 2026. With Hanoi now linked to Central Asia and Europe, Sri Lankan travellers have a growing choice of destinations reachable through Vietjet’s extensive network.
The inauguration ceremonies took place at Almaty International Airport and Václav Havel Airport Prague on 10 October, amid a warm welcome from local leaders, residents and visitors. The inaugural flights were greeted with traditional water cannon salutes and performances showcasing local cultural heritage, marking the beginning of new journeys connecting the three regions and welcoming international travellers to Vietnam. Passengers on the inaugural flights also received commemorative gifts from Vietjet and the airports, adding a special touch to their journeys.
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