Business
Trade deficit widens for fifth consecutive month
External sector performance extracts – July 2021
The deficit in the trade account recorded an expansion on a year-on-year basis in July 2021. Earnings from export of goods increased during the month over a year earlier, but expenditure on imports increased at a faster pace, causing the trade deficit to widen for the fifth consecutive month in July 2021. Workers’ remittances declined in July, following the trend observed in June 2021, while earnings from tourism remained at minimal levels. Meanwhile, maintaining the country’s impeccable record of debt service payments, Sri Lanka successfully settled the matured 10-year International Sovereign Bond (ISB) of US dollars 1.0 billion in July 2021. Foreign investment in the government securities market recorded a marginal net inflow, while the Colombo Stock Exchange (CSE) continued to record net outflows during the month. The average spot exchange rate in the interbank market remained broadly stable in July 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 607 million in July 2021 compared to the deficit of US dollars 209 million recorded in July 2020. The cumulative deficit in the trade account from January to July 2021 also widened to US dollars 4,922 million from US dollars 3,471 million in the corresponding period of 2020.
Terms of Trade: Terms of trade, i.e., the ratio of the price of exports to the price of imports, deteriorated by 11.6 per cent in July 2021 compared to July 2020, as the increase in import prices surpassed the increase in export prices.
Performance of Merchandise Exports1
Overall exports: Exports performed well in July 2021 despite the ongoing pandemic. Earnings from merchandise exports in July 2021 recorded an increase of 1.7 per cent to US dollars 1,104 million compared to July 2020. Cumulative export earnings from January to July 2021 amounted to US dollars 6,803 million, compared to US dollars 5,498 million recorded in the corresponding period in 2020.
Industrial exports: Earnings from the export of industrial goods increased by 1.1 per cent in July 2021 compared to July 2020. This increase was mainly due to the increase in earnings from export of petroleum products, machinery and mechanical appliances (primarily parts of mechanical appliances and electronic equipment) and rubber products (tyres and gloves). Earnings from the export of petroleum products improved because of the increase in prices and quantities of bunker fuel supplied, as well as the prices of aviation fuel supplied. Among the sectors that recorded a decline in July 2021 over July 2020 were food, beverages and tobacco (mainly miscellaneous food preparations); textiles and garments (mainly face masks); and plastic articles. Export of garments to the EU and UK region declined in July 2021 compared to July 2020, while exports to the USA and other destinations increased.
Agricultural exports: Total earnings from the export of agricultural goods in July 2021 increased by 2.3 per cent compared to July 2020, mainly due to the increase in export earnings from seafood (such as fresh and frozen tuna, fish fillet, shrimps and prawns) and spices (cinnamon, pepper, cloves, nutmeg and mace etc). However, earnings from the export of tea declined significantly, due to a decline in both volume and prices of tea exported. Further, exports of vegetables and minor agricultural products also recorded a drop due to the decline in earnings from lentils and arecanuts, respectively.
Mineral exports: Earnings from mineral exports were lower in July 2021 than in July 2020 by 6.9 per cent due to a decline in export earnings from minerals such as granite, quartz and zirconium ores.
Export indices: The export volume index declined by 4.2 per cent, while the export unit value index increased by 6.1 per cent on a year-on-year basis in July 2021. This indicates that the increase in export earnings, on a year-on-year basis, was due to the increase in export prices that outpaced the decline in export volumes.
Performance of Merchandise Imports
Overall imports: Expenditure on merchandise imports increased by 32.2 per cent to US dollars 1,710 million compared to US dollars 1,294 million recorded in July 2020. The increase in import expenditure was observed across all main categories of imports, namely, consumer goods, intermediate goods and investment goods, despite some import controls still being in place. On a cumulative basis, total import expenditure from January to July 2021 amounted to US dollars 11,725 million, compared to US dollars 8,968 million recorded in the corresponding period in 2020. (CBSL)
Business
SIA warns of 1,000 SME collapses, urges fair policies to protect Sri Lanka’s rooftop solar sector
By Sanath Nanayakkare
The Solar Industries Association (SIA), representing over 1,000 companies and employing 40,000 workers in Sri Lanka’s rooftop solar sector, issued a stern warning recently regarding threats to the industry’s survival and the nation’s renewable energy ambitions. The association condemned recent regulatory instability and called for urgent policy reforms to avert economic and social crises.
The SIA categorically rejected the Ceylon Electricity Board’s (CEB) claim that rooftop solar installations caused the recent island-wide power outage, calling the accusation “baseless and misleading.”
“Public trust is eroded when accountability is misdirected,” the SIA stated. “We demand an independent, transparent investigation led by experts appointed by the Ministry or the Public Utilities Commission (PUCSL). The CEB’s unilateral statements disregard the sector’s contributions and jeopardize Sri Lanka’s renewable energy transition,” they said.
“While acknowledging the formation of a tariff determination committee, the SIA criticized its narrow focus on financial parameters, ignoring the sector’s socioeconomic value. Rooftop solar empowers businesses and households with energy independence, reduces grid strain, and supports climate goals. However, proposed volatile tariff structures risk destabilizing over 100,000 installations—primarily owned by middle-class families—and deter future investment,” they noted.
“A rigid, equation-based tariff system is unsustainable,” the association warned. “Sri Lanka needs a stable policy framework to attract long-term investments. For instance, retirees could invest EPF savings into solar projects, securing income while advancing national energy targets. Without urgent action, 1,000 SMEs and 40,000 jobs face collapse, with dire consequences for employment, energy security, and economic stability,” they pointed out.
SIA urged policymakers to establish an independent committee to investigate the power outage fairly, expand the tariff committee’s mandate to include socioeconomic and environmental benefits and implement predictable policies to safeguard SMEs, households, and investor confidence.
“Sri Lanka stands at a crossroads,” the SIA emphasized. “Protecting rooftop solar isn’t just about energy—it’s about livelihoods, economic resilience, and a sustainable future. We urge stakeholders to collaborate on solutions that prioritize both people and progress,: they emphasized.
SLT-MOBITEL has entered into a strategic partnership with Rush Lanka Group to provide exclusive SLT-MOBITEL Fibre connectivity solutions to their portfolio of luxury apartment developments in Colombo and the suburbs, enhancing the digital experience of all residents.
The agreement was signed between Imantha Wijekoon, Chief Business Officer of Consumer Business at SLT, and Zaid Ariff, Director of Construction at the Rush Group headquarters. Representatives from both companies also attended the ceremony.
Under the partnership, SLT-MOBITEL will serve as the exclusive digital service provider for five prestigious Rush Lanka developments including Street Rush Residencies and Rush Court 4 in Mt. Lavinia, Rush Tower 2, Rush Metropolis in Dehiwala, and Rush Court 5 in Colombo 14. The collaboration ensures residents will enjoy superior fibre connectivity speeds, enabling seamless digital experiences in modern smart homes. The partnership with the Rush Lanka Group aligns with SLT-MOBITEL’s commitment to offer ultra-fast, reliable connectivity solutions to residential developments. Delivering exclusive fibre connectivity to luxury apartments, SLT-MOBITEL ensures residents have access to world-class digital services that complement the living experience promised by Rush Lanka Group.
Powered by advanced fibre technology, SLT-MOBITEL network will provide the residences with seamless performance across digital activities. The SLT-MOBITEL Fibre backbone ensures lag-free experiences whether tenants are gaming online, attending virtual classes, working remotely, or streaming high-definition entertainment. SLT-MOBITEL Fibre will transform the lifestyles of all apartment users bringing greater convenience and superior quality of life.
Rush Lanka Group, established in 1992, is a property developer specializing in luxury and semi-luxury apartments.
Starting its promotional work for 2025, Sri Lanka Tourism Promotion Bureau (SLTPB) added another feather into its cap of endorsements, by being recognized as the most innovative Tourism Board promotion in Outbound Travel Mart (OTM) . In parallel to that, several other sub events were held. The OTM was held in Jio World Convention Centre, Mumbai—India, from 30th January to 01st February 2025.Before OTM, the Global Village – Global Exchange & Trade Exhibition was held at the Surat International Exhibition & Convention Centre , Sarsana, Surat (Gujarat – India , from 25th to 27th January 2025. This travel fair was organized by Southern Gujarat Chamber of Commerce and Industry (SGCCI).
Sri Lanka participated in both OTM and South Asia’s Travel & Tourism Exchange (SATTE), held from 19th – 21st Feb 2025, in New Delhi, India . This was an excellent opportunity for Sri Lanka to promote it’s potential as a unique travel destination, especially for the Indian counterparts, as SLTPB has identified India as the number one source market for Sri Lanka, tourism bringing the largest number of tourist arrivals to the destination.
Royal defeat S.Thomas’ by 4 wickets in 48th Mustangs Trophy encounter
‘Inch by inch’: Myanmar rebels close in on key military base in Chin State
Russian captain in North Sea ship collision charged with manslaughter
-
Editorial7 days agoRanil roasted in London
-
Features7 days agoThe JVP insurrection of 1971 as I saw it as GA Ampara
-
Opinion6 days agoInsulting SL armed forces
-
Features7 days agoMr. JR Jayewardene’s passport
-
News4 days agoAlfred Duraiappa’s relative killed in Canada shooting
-
Features7 days agoAs superpower America falls into chaos, being small is beautiful for Sri Lanka
-
Opinion7 days agoBeyond Victory: sportsmanship thrives at Moratuwa Big Match
-
Features7 days agoMemorable moments during my years in Parliament