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)
Experts explore what sets Sri Lanka apart as a tourist destination
Conservation Tourism Webinar
The Conservation Tourism webinar series organised by Sri Lanka Tourism Alliance was held last month, to explore the topic of ‘Wildlife and Nature Conservation, as it applies to the Future Sustainability of Sri Lanka’s Tourism Industry’.
The webinar attracted a record number of virtual attendees and featured an eminent panel of speakers. The session was introduced by Co-Chair of the Sri Lanka Tourism Alliance, Malik J Fernando, and moderated by Niranga Gunaratna, Director of Communications at Shangri-La Colombo & Shangri-La Hambantota.
The speakers touched on important elements such as what sets Sri Lanka apart as a tourist destination and the economic value of Sri Lanka’s nature and wildlife to the visitor economy. It was clearly established that our biodiversity was the main attraction for tourists. The webinar went on to discuss major challenges faced by Sri Lanka’s nature and wildlife and the consequences to local tourism. The speakers expounded how the tourism industry could bring about conservation outcomes, that would also be beneficial to their own bottom line.
Srilal Miththapala, Past President of The Hotels Association of Sri Lanka (THASL) emphasized that wildlife is a critical component of Sri Lanka’s tourism industry and that in 2018, out of the 2.2 million tourists who visited Sri Lanka, 50% had visited Sri Lanka’s wildlife parks. He also spoke of how he tried to “awaken” people to the value of Sri Lanka’s wildlife by assigning economic value to this natural resource, especially for wild elephants. Sadly, Sri Lanka whilst being one of the best countries to see them in the wild, is also the country with the worst human-elephant conflict (HEC) in the world. On average over 300 elephants are killed in Sri Lanka annually due to HEC.
Toby Sinclair, Director of &Beyond Asia has over 40 years’ experience in Sri Lanka and with his international lens on tourism, he stated how a couple of decades ago Sri Lanka was certainly the best place to see leopards and elephants in the wild but because the country has chosen “quantity over quality”, the quality of those experiences has declined over time. “Driving in Yala has become like driving down Galle Road at 5 o’clock in the evening,” he said. Mismanagement of our wildlife resources, lack of training for wildlife park guides and jeep drivers and not improving the standard of the visitor experience are keeping Sri Lanka from becoming a successful wildlife tourism destination. “The potential of Sri Lanka is enormous. I am optimistic but I am very concerned that we are going to kill the golden-goose”.
Dr Sumith Pilapitiya, Former Director General of Sri Lanka’s Department of Wildlife Conservation (DWC) highlighted that “Sri Lanka has the ‘potential’ to be the best wildlife tourism destination outside Africa”, however despite being blessed with every natural resource, it is unlikely that we will reach that potential, as the country lacks strategic direction. Rather we are destroying that potential by destroying our nature and wildlife. He went on to say that the private tourism sector should be doing much more, to work with the government in order to strategically develop the sector by protecting its natural resources, rather than sit complacent while they focus on reaping the benefits of Sri Lanka’s unique biodiversity today. “If Sri Lanka is to reach its potential as the best wildlife tourism destination outside of Africa, the private tourism sector has to play a significant role to make that happen”.
Prime Group offers ‘ultimate’ real estate investment plan
In a concerted effort to open up its exceptional and diverse housing portfolio to a larger portion of Sri Lankans, the country’s largest property development conglomerate, Prime Group recently introduced a revolutionary payment plan, currently unmatched by any other in the industry. The highly-attractive, industry-first offering assures peace of mind for customers by delivering financial flexibility and empowering them to own their dream home at their convenience.The incomparable scheme opens doors for customers to pay as little as 20% of the housing unit’s total value as a down payment, 25% paid in easy instalments over 30 months and the balance 55% when their new home is handed over to them. All Investors can also enjoy guaranteed capital gain and effective ROI of over 75% during 2.5 years for their initial investment. Further, it allows customers to access non-accessible investments and take advantage of a pre-approved mortgage within 30 months. The easy to grasp scheme was carefully curated by Prime Group with over 26 years of enriched experience in the property sector to enable a larger proportion of financially diverse customers to make a smart, well informed decision with utter convenience to make their dream home a reality. The company’s new offering is first introduced to families and individuals looking to put down roots in the scenic, lush green environs present at 88 Residence Piliyandala, Kahathuduwa, which is now open for reservations.”Prime Group has always been deeply committed to delivering projects that meet the needs of the market and flexible financing is one way we achieve this. Therefore, we are thrilled to launch this exceptional ‘Ultimate Real Estate Investment Plan’ for the first time in Sri Lanka. The bedrock of offering is to enable Sri Lankans to materialise their dream home, without worrying about paying the current required down payment of over 30% upfront, which is a welcome respite during these tough economic conditions,” said Prime Group Chairman Premalal Brahmanage”It should also be mentioned that the salary levels of many Sri Lankans do not often allow them to pay off the rest of the 60% within just 2.5 years. We wanted to address this concern, by enabling our customers to pay off just 25% of the value of the property within 2.5 years to making these homes more affordable. This means only 45% of the total value has to be paid at the hand over point. For the balance of 55%, customers are able to pay utilising a bank loan which can also be arranged by Prime Group. Most importantly, customers can always purchase these homes as an investment and sell it after 2.5 years with a minimum effective return on investment of 75%. Therefore, we are confident that this unique scheme will open our high quality portfolio of wholesome living spaces open to a broader community of customers, along with the opportunity to proactively manage their finances, in a long-term affordable way.”The 88 Residence Kahathuduwa is a tranquil, luxury living community overlooking an evergreen paddy field in Piliyandala, 500m away from the proposed Ruwanpura Highway, and 2 km from the Kahathuduwa highway entrance as well as 900m to the 120 bus route. The complex hosts a collection of four diverse types of 88 spacious, two- to three-bedroom, one- to two-storey homes prices starting from Rs. 14.5 million, this luxury complex is slated for completion in early 2024. “As the premier real estate developer in the country, it is vital that we play our part in making sure we do all we can to support our customers at a time when there is an increase in demand for affordable housing in prime locations across the island.
Clogard Tab Wasana to facilitate online learning
Clogard Natural Salt Tab Wasana – a consumer promotion by the leading oral care brand Clogard will roll out from 1st September to 30th November 2021. Through this promotion, the participants will stand a chance to win brand new tabs to make their online learning a reality.
Since the Covid-19 outbreak, online learning has been the most feasible and practical mode of education for students. As the online learning trend continues, the lack of resources such as computers and tabs has become a major barrier for students to continue online learning from their homes.
The consumers who buy the new Clogard Natural Salt 120g (Tab Wasana promo pack) toothpaste pack can stand a chance to win a brand new tab. This pack is available islandwide. Each Clogard Natural Salt 120g (Tab Wasana promo pack) pack carries a six-digit code printed inside. Clogard requests the consumers to send the secret code along with their or their guardian’s NIC number to 8866 via SMS (Type TAB<space>XXXXXX<space>NIC Number). The winners will be selected from 1st October till 30th November.
Commenting on the new promotion, Ramila Fernando, Senior Brand Manager of Clogard said, ” The Tab Wasana campaign will not only help in the immediate education needs of these children but will also help them gain the necessary exposure to technology and knowledge that they need to have in an increasingly digital world.”
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