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Trade account deficit widens YoY for fourth consecutive month

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External sector performance – June 2021

The deficit in the trade account widened on a year-on-year basis for the fourth consecutive month in June 2021. Both exports and imports were significantly higher in June 2021 compared to June 2020. Considering the first half of the year, although exports recorded a healthy growth, import expenditure increased at a higher pace. Workers’ remittances recorded a year-on-year decline in June 2021, while earnings from tourism remained at minimal levels. In the financial account, both foreign investment in the government securities market and the Colombo Stock Exchange (CSE) continued to record marginal net outflows during the month. The Sri Lankan rupee remained broadly stable in June 2021.

Trade Balance and Terms of Trade

Trade Balance: The deficit in the trade account widened on a year-on-year basis to US dollars 652 million in June 2021 compared to the deficit of US dollars 161 million recorded in June 2020. The cumulative deficit in the trade account in the first half of the year also widened to US dollars 4,316 million from US dollars 3,262 million recorded in the corresponding period in 2020, and US dollars 3,597 million recorded in the corresponding period in 2019. The major contributory factors for this outcome 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 16.7 per cent in June 2021 compared to June 2020, as the increase in import prices were higher than the increase of export prices, compared to June 2020.

Performance of Merchandise Exports1

Overall exports: Earnings from merchandise exports in June 2021 recorded an increase of 12.6 per cent to US dollars 1,007 million on a year-on-year basis. Cumulative export earnings from January to June 2021 amounted to US dollars 5,699 million, compared to US dollars 4,413 million recorded in the corresponding period in 2020 and US dollars 5,999 million recorded in the corresponding period in 2019. Exports improved by 12.9 per cent in June 2021 over May 2021.

Industrial exports: Earnings from the export of industrial goods increased by 16.6 per cent in June 2021 compared to June 2020, with a broad-based increase in export earnings under most of the categories. Substantial increases were noted with respect to rubber products (tyres and gloves), petroleum products, machinery and mechanical appliances (all subcategories), textiles and garments, gems, diamonds and jewellery, and base metals and articles. Increase in earnings from petroleum products was due to the increase in unit values of bunker fuel along with some improvement in quantities supplied. Despite the ongoing pandemic related disruptions, the main export segments also recorded increased earnings on a month-on-month basis. Total earnings from industrial exports from January to June 2021 amounted to US dollars 4,408 million with a growth of 31.3 per cent from the same period in 2020.

Agricultural exports: Total earnings from the export of agricultural goods in June 2021 remained around the same values recorded in June 2020. Earnings from tea exports increased due to improvement in export volumes while the export unit value declined. Further, earnings from exports of coconut (both kernel and non-kernel products), spices (such as pepper and cloves) and unmanufactured tobacco increased. In contrast, there was a decline in export earnings from seafood, minor agricultural products (fruits, arecanuts, betel leaves, etc.) and vegetables (fresh, frozen, dried, preserved, etc.). Total earnings from agricultural exports during the first half of 2021 amounted to US dollars 1,259 million, with a growth of 21.2 per cent from the same period in 2020.

Mineral exports: Earnings from mineral exports were higher in June 2021 than in June 2020 with increases in earnings from earths and stone as well as ores, slag and ash. Total earnings from mineral exports from January to June 2021 amounted to US dollars 25 million.

1 Exports classified according to Standard International Trade Classification Revision 4 are presented in Annex I

Export indices: The export volume and unit value indices increased by 8.9 per cent and 3.4 per cent, respectively, on a year-on-year basis in June 2021. These indicate that the increase in export earnings, on a year-on-year basis, was due to the combined impact of higher export volumes and prices.

Performance of Merchandise Imports2

Overall imports: Expenditure on merchandise imports increased by 57.2 per cent to US dollars 1,659 million compared to US dollars 1,055 million recorded in June 2020. The increase in import expenditure was observed across all main categories of imports, namely, consumer goods, intermediate goods and investment goods, although expenditure on petroleum imports was low due to low import volumes during June 2021. On a cumulative basis, total import expenditure in the first half of 2021 amounted to US dollars 10,015 million, compared to US dollars 7,675 million recorded in the corresponding period in 2020 and US dollars 9,596 million recorded in the corresponding period in 2019.

Consumer goods: Expenditure on the importation of both food and beverages and non-food consumer good categories increased substantially in June 2021 compared to a year ago. Expenditure on food and beverages increased by 61.9 per cent to US dollars 165.0 million with a broad-based increase in all categories, except seafood. However, the largest contribution to the increase in total food bill was from dairy products (mainly milk powder, but also cheese and butter), and oils and fats (mainly coconut oil, but also other types of oil). Expenditure on non-food consumer goods increased by 47.6 per cent to US dollars 217.2 million, contributed mainly by medical and pharmaceuticals (mainly vaccines), home appliances (televisions, rice cookers, fans, refrigerators, etc.), mobile phones, rubber tyres and tubes, etc. Total expenditure on the importation of consumer goods in the first half of 2021 amounted to US dollars 1,912 million, which is an increase of 7.3 per cent compared to the same period in 2020.

Intermediate goods: Expenditure on importation of intermediate goods in June 2021 increased by 48.5 per cent over June 2020, despite the 40.0 per cent decline in the expenditure on fuel. Expenditure on fuel declined due to non-importation of crude oil and low import volumes of other types of petroleum, taking into consideration the availability of sufficient stocks. The expenditure on almost all other types of intermediate goods increased, except fertiliser, mineral products and unmanufactured tobacco, reflecting increased economic activity in the country as well as increased commodity prices in the world market. Total expenditure on importation of intermediate goods during the first half of 2021 amounted to US dollars 5,950 million with an increase of 42.8 per cent from the same period in 2020.

(CBSL)



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Arimac spearheading 10-years of digital transformation in Asia 

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Arimac Digital launched its journey 10 years ago in the digital industry as an up-and-coming innovative tech company. Today, Arimac is spearheading digital solutions for customers around the world and is dominating the Asian region markets, moving from strength to strength with disruptive solutions in web and mobile development, immersive technologies, robotics and cognitive sciences, and game development to cater to the rapidly changing dynamics of global technology.

Since its inception, Arimac has expanded to several countries, including UAE, Caribbean Islands, Fiji, and Australia serving global industry behemoths, such as Dhiraagu, Ooredoo, Etihad, Visa, and Emirates over its ten years of operations.  Arimac’s ecosystem of products and services also support a star-studded local client base, which includes Dialog Axiata, Coca-Cola, Microsoft, MAS, Hemas, SriLankan Airlines, Brandix, 3M, Lowe LDB, Nestle, and Unilever. Arimac’s solutions currently touch 150 million consumers around the world daily, transforming their lives everyday through the power of technology.

“Surpassing numerous challenges and marking remarkable milestones, we are very proud to celebrate our 10th anniversary at Arimac Digital. During these last 10 years, our passion for technology, the distinctive competences, the skills of our people, and our deep roots in agile innovation have been the driving force behind our daily efforts to invest in new capabilities and continuous innovations for our clients. Even within this challenging economy, we have been able to create groundbreaking innovations that put Sri Lanka on the map and establish ourselves as an ICT industry leader.  Our success today is undoubtedly due to the deep commitment, passion, and skill of our employees. None of these achievements would have been a reality if not for the continued and dedicated efforts of our people. As we step into a new decade, we stand strong and focused to further revolutionize this digital sphere and keep Sri Lanka on the map as a star destination in Asia for technology solutions,” stated Chamira Jayasinghe, Founder and CEO of Arimac Digital.

The secret ingredient behind Arimac’s success is the diversity of its 230+ staff members, who come from all walks of life. From Stanford graduates to those who have not yet completed their academic education, every talented and passionate youth has an equal opportunity at Arimac to showcase and hone their talents. This is the ethos on which Arimac was founded, where Arimac’s doors are open for pure talent, passion, and fire without any pre-requisite for language fluency or educational qualifications. Over the past decade, Arimac has molded over 30,000 young minds on innovative digital solutions, such as Diyazen – South Asia’s first humanoid robot, and game developments including Kanchayudha and NERO.  Arimac also completed a global campaign for the United Nations to showcase their Sustainable Developmental Goals, which received more than one hundred million impressions from across different countries.

Marking their decennial with a symbol of powerful innovation, Arimac Digital launches NERO, Sri Lanka’s first fast-paced, stealth-action game developed end-to-end by Sri Lankan talent at Arimac’s Game Design Studio. NERO marks the commencement of Sri Lanka’s foray into the global stage of gaming showcasing the immense talent of Sri Lankan game developers. It is the love child of a group of highly driven game developers at Arimac, who spent countless hours conducting extensive research and developing a world-class gaming experience over three years to create a watershed game celebrating the heroism of unsung war heroes in Sri Lanka.

Arimac has garnered many prestigious accolades over the years, including APICTA, NBQSA, Stevie Awards, as well as the coveted Microsoft Gold Partnership, and is also certified as one of the Great Places to Work® in Sri Lanka. Yet, when questioned on the pride he feels to have received such recognition, Chamira Jayasinghe said, “What gives me more pleasure is reflecting on the relationships and friendships we have fostered over the past decade along with the amazing innovative technologies we have launched here in our homeland and overseas. We have come a long way from being a small tech company to a brand that has pioneered the Sri Lankan tech industry and now Asia. We look forward to many more years of digital disruption in global markets while uplifting the untapped talent of regional youth and minimizing brain drain in Sri Lanka.”

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SLT-MOBITEL unleashes the power of fibre technology with ‘Fibre for the Nation’

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The world is connected digitally in more ways than ever before, and technology is everything. Nations and societies recognize the importance of keeping abreast with cutting-edge technology and high-speed connectivity as among the most essential components for growth; especially vital for an emerging digital economy to boost development, healthcare and education.

SLT-MOBITEL as the National ICT Solutions Provider is helping to shape the future of our nation, empowering and improving the quality of life for all citizens. Unleashing the power of fibre technology, SLT-Mobitel Fibre is building fibre networks that are robust, with unmatched speed, offering users innovative services via multiple devices, and thus enhancing user experience with endless possibilities and unlimited opportunities.

Fibre at the speed of light

SLT-MOBITEL is revolutionizing connectivity across the country by unveiling significant enhancements to its fibre networks with ultra-high speed and lower latency navigating Sri Lanka’s digital transformation.

SLT-Mobitel Fibre aims at providing superior dependable data connectivity and driving the adoption of high-speed broadband in the country, enhancing customers’ experience while taking proactive steps to ensure futuristic global connectivity. SLT-Mobitel Fibre customers can now benefit from an unmatched data capacity and service reliability with exciting and uninterrupted download speeds of up to 100 to 1000 Mbps.

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Seylan Bank partners with STAREMIT to facilitate convenient remittances for Sri Lankans in South Korea

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Seylan Bank, the Bank with a Heart announced its partnership with South Korea’s STAREMIT, enabling a convenient real-time money transfer option for Sri Lankans in South Korea. The partnership comes at the opportune time when many Sri Lankan expatriates have chosen to send money to Sri Lanka to support the nation, and Seylan Bank’s dedicated remittance opportunity makes it safe and affordable to transfer funds into the country.

Expatriate Sri Lankans can use the STAREMIT app to conveniently carry out transactions 24/7 through a smart device, for a “ZERO fee” until the 30th of November 2021, incurring no commission costs from either party, when remitting funds to or through Seylan Bank. Senders will be able to leverage on competitive exchange rates, and receive an additional Rs. 2 above the rate for every dollar remitted. The exchange takes place in real-time, with money credited to any bank account in Sri Lanka.

“At a time when foreign exchange inflows are invaluable to the country, Seylan Bank is proud to be able to provide convenient and affordable options for Sri Lankans living overseas to make their remittances. The partnership with STAREMIT opens up our facilities for the many Sri Lankans working in South Korea, to safely send money to their loved ones back at home. As the Bank with a Heart, we will continue to grow strategic partnerships with financial institutions worldwide, to provide the best service to our customers.” stated Malik Wickramanayake, Deputy General Manager – Operations Seylan Bank.

STAREMIT joins the strong lineup of international remittances partners of Seylan Bank, through whom the Bank facilitates convenient remittance services for Sri Lankans living and working abroad. As a customer-centric bank, Seylan focuses on overseas Sri Lankans and their loved ones’ back home, providing the most on their transactions with multiple added benefits. Seylan invites its valued customers to experience the unparalleled remittance services provided by the bank, ensuring the best benefits through their many inward remittance partners including Seycash, RIA, Western Union, Transfast, Instant Cash, Unistream, Cash Express, Speed Send, Intel Express, Placid Express to name a few.

For more information on the platform and its services please visit www.seylan.lk or WhatsApp the Seylan Bank 24/7 hotline on +94 772008888.

Seylan Bank, the Bank with a Heart, operates with a vision to offer the ultimate banking experience to its valued customers through cutting-edge technology, innovative products, and best-in-class services. The Bank has a growing clientele of SMEs, Retail and Corporate Customers, and has expanded its footprint with 172 branches, 70 Cash Deposit Machines, 86 Cheque Deposit Machines and an ATM network of 216 units across the country. Seylan Bank has been endorsed as a financially stable organization with performance excellence across the board by Fitch Ratings, with the bank’s national long-term rating revised to ‘A’ (lka). The bank was ranked second among public listed companies for transparency in corporate reporting by Transparency Global and is now part of the S&P Dow Jones SL 20 Index. These achievements are a testament to Seylan Bank’s financial stability and unwavering dedication to ensuring excellence across all aspects.

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