Sri Lanka’s exports recorded 40.9 per cent year-on-year growth in the first half of this year, helping the island nation with a foreign inflow of $5.1 billion, the country’s Industry and Commerce Ministry said.However, the ministry said the island nation will have to diversify its export destinations if the $50 billion economy is to achieve its full year export target of $9.1 billion as the United States and European Union are both facing a debt crisis.
“We should be vigilant about uncertainties in the global financial market, especially in the developed markets,” said the report. “Sri Lanka needs to reduce its dependency on EU and USA markets by finding new markets for the long run.”
During the first half of 2011, Industrial product exports grew by 49 per cent year-on-year. Fisheries and agricultural exports expanded by 26.3 per cent and 21 per cent respectively.
Textile and garments and tea have accounted for 42.3 per cent and 13.7 per cent of the total export revenue in the first half.
Sri Lanka’s exports jumped 17.3 per cent in 2010 to $8.3 billion year-on-year with textiles and garments contributing with $3.5 billion and tea with $1.4 billion. Sri Lanka’s central bank kept policy rates unchanged on Friday as expected on hopes for moderating inflation due to improving food supply, but warned it will take appropriate action if demand-driven pressure increases. The island nation aims for record 8.5 per cent economic growth this year, topping 2010’s 8 per cent, which was the highest level in 32 years. Sri Lanka expects annual inflation, which reached 7.5 per cent in July, to slow to 6 per cent by the end of 2011.
For the seventh straight month, the central bank on Friday left the repurchase and reverse repurchase rates unchanged at 7 per cent and 8.5 per cent, respectively, their six-year lows. It also held commercial banks’ Statutory Reserve Ratio (SRR) unchanged, as expected.
“With the continuous improvements in the supply of most food items, inflation is expected to moderate in the coming months,” the central bank said in its monetary policy review statement.Due to heavy monsoon rains during the fourth quarter of every year, food production in Sri Lanka is higher then compared with other months.
From / Gulf Today