Business
Decline in exports; lower global demand
External Sector Performance – November 2022
The merchandise trade deficit continued to remain low compared to a year ago, though it widened in November 2022 over the previous month. Earnings from merchandise exports declined in November 2022, mainly due to lower global demand, particularly for garment exports. Meanwhile, merchandise import expenditure also declined for the ninth consecutive month in November 2022 on year-on-year basis, despite recording an increase, compared to October 2022. Workers’ remittances continued to recover and recorded a notable increase in November 2022 over a year earlier and the previous month.
Earnings from tourism increased in November 2022 over the previous month supported by a growth of tourist arrivals over 40 per cent. Foreign investment in the government securities market recorded a marginal net inflow during November 2022, while the Colombo Stock Exchange (CSE) recorded a marginal net outflow during November 2022. The Central Bank continued to provide foreign exchange to the domestic foreign exchange market to part finance essential imports. Consequently, the build-up of gross official reserves remained constrained. Meanwhile, the weighted average spot exchange rate in the interbank market remained around Rs. 363 per US dollar during the month.
Merchandise Trade Balance
and Terms of Trade
Trade Balance: The deficit in the merchandise trade account narrowed to US dollars 450 million in November 2022, compared to the deficit of US dollars 553 million recorded in November 2021. However, the merchandise trade deficit has shown a tendency to widen on month-on-month basis since recording a surplus in June 2022. The cumulative deficit in the trade account during January-November 2022 recorded at US dollars 4,839 million, a decline from US dollars 7,054 million recorded over the same period in 2021. The major contributory factors for the decline in the cumulative trade deficit are shown in Figure 1.
Terms of Trade: Terms of trade, i.e., the ratio of the price of exports to the price of imports, deteriorated by 5.3 per cent in November 2022, compared to November 2021, as the increase in import prices surpassed the increase in export prices.
Performance of Merchandise
Exports
Overall exports: Earnings from merchandise exports declined by 17.9 per cent in November 2022, over November 2021, to US dollars 994 million, recording a slight decline for the third consecutive month, on a month-on-month basis. While declines in earnings were observed across all main categories, industrial exports mainly contributed to the contraction in earnings. However, cumulative export earnings during January-November 2022 increased by 6.0 per cent over the same period in the last year to US dollars 12,026 million, which was mainly driven by a 9.4 per cent improvement in industrial exports amidst a decline in agricultural and mineral exports.
Industrial exports: Earnings from the export of industrial goods declined in November 2022 by 15.4 per cent, compared to November 2021. This decline was due to a broad-based decline in earnings from most of the industrial products led mainly by garments and rubber products. Earnings from export of garments declined by 8.3 per cent (y-o-y) driven by lower global demand for garment exports. Accordingly, exports of garments to most of the major markets (the USA, the EU and the UK) recorded declines. The decline in earnings from rubber products was due to the lower exports of tires and household gloves. Further, a sizable decline was recorded in the exports of petroleum products (led by lower export volumes); animal fodder (mainly, wheat residues); and food, beverages, and tobacco (mainly, vegetable, fruit, and nuts preparations), although earnings from gems, diamonds, and jewellery; and machinery and mechanical appliances (mainly, electronic equipment) increased. Earnings from exports of petroleum products recorded a decline of 30.7 per cent in November 2022 (y-o-y), due to lower volumes of bunker and aviation fuel supplied despite a notable increase in average export prices.
Agricultural exports: Earnings from the export of agricultural goods declined by 25.9 per cent in November 2022 compared to November 2021, due to a broad-based decline in all subcategories of agricultural goods led by spices and coconut related products. Export earnings from spices declined due to the lower earnings from all subcategories, whereas earnings from pepper declined the most, driven by lower export volumes. Both kernel and non-kernel coconut related products contributed to the decline in earnings from coconut related products. The drop in export earnings from tea was mainly due to lower export volumes (a decline of 25.5 per cent), despite high average export prices which recorded an increase of 20.5 per cent, (y-o-y). (CBSL)
Company stresses ambition to surpass this milestone
Eyes markets across Africa and beyond
In a groundbreaking achievement for Sri Lanka’s IT and electronics manufacturing industry, EWIS Colombo Ltd, the country’s first and only local computer manufacturer, has successfully exported its first consignment of locally built laptops to Zimbabwe.
This landmark event not only positions Sri Lanka as an emerging force in global IT hardware manufacturing but also highlights EWIS’s commitment to innovation, quality, and excellence on the international stage.
This historic shipment, dispatched from EWIS’s state-of-the-art manufacturing facility in Samajasewapura, Sooriyawewa, underscores the company’s dedication to delivering world-class technology solutions. With over 11 years of expertise in manufacturing and assembly, EWIS Colombo Ltd has played a pivotal role in driving Sri Lanka’s ICT sector forward. As a Board of Investment (BOI) Section 17-approved company, EWIS has established the country’s first and only local computer manufacturing plant, paving the way for the nation’s growth in high-tech exports.
Speaking on this momentous achievement, Sanjeewa Wickramanayake, Chairman of EWIS Colombo Ltd, said: “This milestone is not just for EWIS but for Sri Lanka as a whole. It proves that our country has the talent, capability, and ambition to manufacture and export high-quality IT products, competing confidently on the global stage. As we continue expanding beyond local markets, we take immense pride in showcasing Sri Lanka’s excellence in technology and innovation to the world. EWIS’s commitment to world-class quality is reinforced by its ISO 9001:2015, ISO 14001:2015, CE, FCC, and RoHS certifications, ensuring compliance with international quality, safety, and environmental standards.”
Speaking further he said:
“For nearly four decades, EWIS has been a trailblazer in Sri Lanka’s ICT sector, delivering cutting-edge solutions for education, businesses, and government enterprises.
With over 11 years of local manufacturing and assembly expertise, EWIS has continuously refined its capabilities to produce high-quality, internationally competitive IT hardware. The successful export to Zimbabwe represents a bold step toward expanding EWIS’s global footprint, reinforcing Sri Lanka’s potential as a world-class technology and manufacturing hub.”
The International Institute of Health Sciences (IIHS), a pioneer in healthcare training for over 23 years, has partnered with the University of Surrey, UK, to revolutionise healthcare education in Sri Lanka and the broader South Asian region. This will create a world-class academic pathway for aspiring nursing and healthcare professionals, as well as young individuals seeking careers in the field. Under this agreement, IIHS and the University of Surrey will introduce a series of academic initiatives to enhance healthcare training and accessibility.
These include delivering internationally recognised nursing programmes that allow Sri Lankan and regional students to earn globally competitive qualifications in Sri Lanka.
Commenting on the move, Dr. Kithsiri Edirisinghe, CEO & Dean of Undergraduate Studies at IIHS, said: “This MOU marks a significant step in our mission to deliver world-class healthcare education to Sri Lanka and the region. IIHS remains dedicated to shaping the future of healthcare professionals and fostering global healthcare leadership.” Dr. Shelini Surendran, Associate Dean (International) at the University of Surrey, emphasised: “Sri Lanka is establishing itself as a regional education hub, and this partnership ensures students across Asia can access top-tier UK healthcare education at IIHS. By bridging academic excellence with accessibility, we provide students with a clear pathway to their professional goals.”
Dialog Television, Sri Lanka’s #1 Pay-TV service provider, has partnered with Emerging Media to enhance the convenience and effectiveness of advertising. This collaboration brings together Dialog Television’s world-class entertainment, featuring 18 advertisable channels across genres such as movies, edutainment, kids, music, sports, and local content, with Emerging Media’s expertise in digital advertising and targeted marketing. This synergy creates a seamless platform for businesses to maximize brand exposure across multiple channels.
With a reach of over 1.7 million households, Dialog Television provides advertisers with a powerful avenue to engage diverse audiences. Brands can place advertisements on leading international and local channels such as &flix, Star Movies, TLC, Animal Planet, AXN, Zee Café, Comedy Central, Star Plus, A+, Nickelodeon, Star Vijay, Zee Tamil, Star Sports, Ten Cricket, Sony SIX, ThePapare TV, Channel One, Citi Hitz and Channel C. Through this partnership, Emerging Media will facilitate advertising sales, allowing businesses to target specific viewer segments while simplifying the media buying process with a single point of contact.
Commenting on the partnership, Lim Li San, Group Chief Operating Officer at Dialog Axiata PLC, stated, “As Sri Lanka’s premier Pay-TV service provider, we serve more than 1.7 million households with over 6 million pairs of captive eyeballs across Sri Lanka. Today, we are excited to embark on this partnership with Emerging Media to avail our Dialog Television platform and brand strength to provide quality advertisement exposure and customer engagement to local businesses across Sri Lanka.”
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