Sri Lanka only country in South Asia where Exports have grown stronger than Imports
on: April 17 ,2018 In: Developing News
The World Bank reported that Sri Lanka is the only country in which exports have grown stronger than imports recently, while exports remained relatively flat throughout South Asia, as given in the third installment of the series, South Asia Economic Focus published last Sunday.
Export growth has been positive in Sri Lanka since the second quarter of 2017. The growth in exports was mainly strengthened by a recovery in the tea industry. Although export growth has also been positive for India and Pakistan for five consecutive quarters and since the third quarter of 2017, respectively, imports to both countries increased more than 10 percent in the last quarter of 2017.
The growth in exports of Sri Lanka was however offset by increasing oil prices and an increase in the import of food and petroleum as a result of a year of inclement weather that Sri Lanka is recovering from. The GSP+ preferential access to the European Union and the tourism sector are expected to positively contribute to the external sector of Sri Lanka.
Foreign Direct Investment (FDI) has shown an upward trend throughout South Asia for the last two years. In Sri Lanka, FDI increased very strongly in two of the seven quarters due to the long-leasing of a port asset and a large land reclamation project. FDI increased very strongly in two of seven quarters in India as well. In Pakistan FDI increased by more than 50% in the third quarter of last year, while FDI increased by 45% in Bangladesh compared to 2016.
Exports of Goods & Services that showed an estimated growth rate of 4.8% in 2017 have been forecasted to grow by 5.0% in 2018. The forecasted growth rate for 2019 and 2020 are however a lower at 4.0% and 3.9% respectively. Imports of Goods & Services that showed a lower estimated rate of growth of 3.4% is forecasted to remain the same in 2018 and 2019 as well, while the forecast for 2020 is slightly higher at 3.5%. However it is cautioned that the increasing occurrence and impact of natural disasters could hamper this growth.
Source: World Bank, 2018 . “Jobless Growth.” South Asia Economic Focus (April) https://openknowledge.worldbank.org/handle/10986/29650
Disclaimer: This is an adaptation of an original work by The World Bank. Views and opinions expressed in the adaptation are the sole responsibility of the author or authors of the adaptation and are not endorsed by The World Bank.