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.
Over 100,000 customers aboard Q+ Payment app
The Q+ Payment App, Sri Lanka’s first QR-based payment application to be launched under LANKAQR, has surpassed the 100,000 registered customers milestone, doubling its customer base in just five months, the app’s owner the Commercial Bank of Ceylon has announced.
The fastest growing QR app in the country, Q+ Payment App has an easy self-registration process, and is well received by customers owing to the convenience and security it offers them in cashless payment processing when they pay for purchases by scanning QR codes via mobile phones or via the in-app bill payment facility, the Bank said.
Designed as a hassle-free payment alternative for cardholders and vendors, the app gained popularity via a series of Bank-driven promotions in collaboration with popular local retailers and due to its participation in a number of Central Bank of Sri Lanka (CBSL) led ‘??????LANKAQR’ programs held across the country.
Positioned as the next dimension of payment options, the Q+ Payment App enables cardholders to pay for purchases via their mobile phones simply by scanning the merchant’s QR code. Since the launch, the app underwent several functionality-enhancing upgrades including biometric authentication login for both the consumer and merchant applications, an ‘In-App Bill Payments’ feature that allows customers connected to the Bank’s Debit, Credit or Prepaid cards to pay bills instantly, the facility to promptly settle Credit Card outstanding and top-up Pre-paid Cards, and most recently, the addition of an ‘Online Pay’ feature which enables customers to pay for online purchases by entering their mobile numbers in merchant websites and apps that have ‘Q+ Payment App’ as a payment option.
The ‘In-App Payments’ feature enables Q+ Payment App customers to make payments in many categories such as data reloads, prepaid and post-paid mobiles, fixed telephone lines, water and electricity (CEB and LECO) and pay-TV bills.
The dynamic and interactive customer experience and convenience the app offers are the driving forces behind its popularity, the Bank said. By binding their cards to the Q+ Payment App, ComBank cardholders avoid pulling out the card from their wallets which prevents card losses and card theft. This also encourages the use of environment friendly, paperless-banking features such as Digital receipts and in-App alerts. Payments done using Q+ Payment App require authentication using a static PIN which ensures the safety and security of transactions, making the Q+ Payment App more secure than a normal card.
Customers can add their ComBank Visa, Mastercard and UnionPay cards to the Q+ Payment App, enabling them to perform LankaQR, mVisa, and Mastercard QR transactions. A maximum of five cards can be added to the app. Q+ Payment App is the only payment app in Sri Lanka that supports LankaQR, mVisa, and Mastercard QR transactions. Moreover, the Q+ Payment App is certified for use at overseas QR merchants through the Visa and MasterCard networks.
Sri Lanka’s first fully carbon neutral bank, the first Sri Lankan bank to be listed among the Top 1000 Banks of the World and the only Sri Lankan bank to be so listed for 11 years consecutively, Commercial Bank operates a network of 268 branches and 931 automated machines in Sri Lanka. The Bank’s overseas operations encompass Bangladesh, where the Bank operates 19 outlets; Myanmar, where it has a Microfinance company in Nay Pyi Taw; and the Maldives, where the Bank has a fully-fledged Tier I Bank with a majority stake.
HNB recognized as ‘Best Retail and SME Bank’ at International Finance Awards
Sri Lanka’s most innovative private sector bank HNB PLC, once again consolidated on its reputation for banking excellence at the International Finance Awards 2021, bagging the Best Retail Bank and Best SME Bank awards in the banking category, a news release said last week.
Organized by the prestigious International Finance Magazine as a global platform for the recognition and celebration of the world’s most successful financial institutions, the awards highlight the accomplishments of corporates leading in innovation, infrastructure development and customer-centricity.
As the sector has evolved due to a raft of regulations, technology developments and market reforms, each applicant has been researched by dedicated experts with special consideration directed towards the strength of their applications, performance and past accomplishments, the release said.
“We are delighted to have once again emerged victorious as the Best Retail Bank and the Best SME Bank organized by the prestigious International Financial Magazine. This recognition is a testament to our employees’ hard work and dedication in the SME and Retail sectors, which have evolved continuously despite the challenges brought on by the pandemic, to deliver unmatched products and excellent service contributing positively towards the growth of our clients. Moving forward, we pledge to continue enhancing our focus on transformative banking by leveraging the power of technology to provide innovative solutions and processes for all our clients,” HNB Deputy General Manager – Retail and SME Banking, Sanjay Wijemanne said.
Catering to the needs of over 2.5 million Sri Lankans island-wide, Retail Banking is a flagship segment for HNB. The Bank has been a pioneer in leveraging digital banking products, services and channels to provide customers with convenient, comprehensive and secured options to transact remotely, the release added.
After the onset of the pandemic, HNB rapidly embedded its full suite of digital offerings into the contactless delivery mechanism advocated by the state, kept branches open during curfew periods as per the guidelines issued by the Central Bank and operated our dedicated Omni Channel engagement Centre on a 24*7 basis.
Subsequently, the bank extended substantial relief to clients in Debt Moratoriums and Working Capital loans at concessionary rates. Notably, HNB was also previously adjudged the Best Retail Bank in Sri Lanka for the 11th time at the Asian Bankers Awards organised by the prestigious Asian Banker Magazine.
With 254 customer centres and more than 780 devices across the country, HNB is one of Sri Lanka’s largest, most technologically innovative banks, having won local and global recognition for its efforts to drive forward a new paradigm in digital banking. HNB has a national rating of AA- (lka) by Fitch Ratings (Lanka) Ltd. The Bank was also ranked among the World Top 1,000 Banks list compiled by the prestigious UK-based Banker Magazine for five consecutive years. HNB was also declared Best Sub-Custodian Bank in Sri Lanka at the Global Finance Awards 2020.
Emirates launches exciting offer for families visiting Dubai during Expo 2020
Emirates is pulling out all stops to make a vacation in Dubai during Expo 2020 a family affair. The airline has rolled out a special offer on children’s tickets to Dubai, in addition to a host of other added-value incentives to ensure a memorable experience in one of the world’s most-loved destinations for family escapades.
With this latest limited time offer, there has never been a better time to visit Dubai than now. In the promotion running until 6 November, families booking tickets to Dubai, will pay only 25% of the adult fare for kids aged 2 to 11 years old, valid for the duration of Expo 2020. The special offer is applicable on all Business and Economy Class tickets to Dubai, for travel dates up until 31 March 2022.
With Dubai being the host city of the largest World Expo ever to be held, Emirates wants global citizens of all ages to experience the excitement of the largest-of-its-kind event in the region. As the Premier Partner and Official Airline of Expo 2020 Dubai, Emirates looks forward to bringing visitors to the event via its route network which connects over 120 destinations to Dubai.
Emirates reveals the top source markets for families with small children traveling to Dubai this winter, as the UK, France, Germany, Russia, Switzerland and Italy. Emirates has also revealed that more than half of the visitors planning a vacation in the coming months have visited Dubai before and intend to stay more than one week to explore what the city has to offer.
Special offers on children’s flight tickets are not all that its customers can look forward to enjoying, with both big and small guaranteed a complimentary Expo Day Pass for every Emirates ticket to Dubai during the event. If that’s not enough to make a family journey to Dubai one that makes perfect sense, additional perks and attractive offers await travellers to ensure a rewarding experience.
Members of the airline’s award-winning loyalty programme, Emirates Skywards, will earn Skywards Miles for flight tickets purchased. Emirates has also launched a special Expo offer where customers will earn 1 Skywards Mile for every 1 minute spent in Dubai until 31 March 2022. Existing and new Emirates Skywards members who sign up for the programme before 31 March 2022, can avail the offer on Emirates.com, and will earn up to 5,000 Miles. With the additional Miles earned during Expo, family members will be able to redeem to enjoy reward flight tickets and other rewarding benefits.
My Emirates Pass is back, enabling customers to enjoy exclusive deals at over 500 retail, dining, and recreational attractions across Dubai and the UAE, simply by presenting their board pass. Details of the offers can be found on www.emirates.com/myemiratespass.
Dubai remains one of the world’s most popular holiday destinations, especially during the winter season, and visitors can choose from an array of hotels to stay at, to suit all budgets, as well as exciting entertainment, dining and shopping options for all ages. From sun-soaked beaches and heritage activities to world class hospitality and leisure facilities, Dubai offers a variety of world-class experiences.
Expo 2020 Dubai’s programme is packed with experiences, exhibits and performances to appeal to the entire family, with a rich line-up of themed weeks, entertainment and edutainment, art, technology and dining options for all palates. Visitors can drop by the 192 national pavilions for a journey through cultures, or the various thematic and special pavilions to get a glimpse of the future and the innovations that are making a difference in tomorrow’s world.
Health and wellbeing: Keeping the health and wellbeing of its passengers as top priority, Emirates has introduced a comprehensive set of safety measures at every step of the customer journey. The airline has also recently introduced contactless technology and scaled up its digital verification capabilities to provide its customers even more opportunities to utilise the IATA Travel Pass this summer.
Travel assurance: Emirates continues to lead the industry with innovative products and services that address traveller needs during a dynamic time. The airline has taken its customer care initiatives further with even more generous and flexible booking policies, an extension of its multi-risk insurance cover, and helping loyal customers retain their miles and tier status.
Customers travelling to Dubai are encouraged to check the latest government travel restrictions in their country of origin and ensure they meet the travel requirements of their final destination. For more information on entry requirements for international visitors to Dubai visit: https://www.emirates.com/english/help/covid-19/dubai-travel-requirements/
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