Bloomberg News

Sri Lanka’s Exports Rise Most in Six Months on Garments, Tea

February 24, 2012

(Updates with garment exports in fourth paragraph.)

Feb. 24 (Bloomberg) -- Sri Lanka’s exports rose the most in six months in December, as demand for garments, textiles, tea and coconuts increased.

Overseas sales increased 24.3 percent from a year earlier to $905.5 million, after rising 11.6 percent in November, the Central Bank of Sri Lanka said in a statement today. Imports rose 33.7 percent to $1.91 billion, leaving a trade deficit of $1 billion.

Sri Lanka devalued the rupee by 3 percent in November to boost exports as Europe’s protracted debt crisis sapped global growth. The central bank on Feb. 9 removed a currency trading band after gross foreign-exchange reserves dropped by about 25 percent from almost $8.1 billion in July, following moves to defend the local currency.

Earnings from textiles and garment exports in December rose 25.2 percent from a year earlier to $383.6 million, the central bank said. Agricultural shipments gained 10.3 percent to $194 million, while the value of industrial exports rose 28.9 percent to $703.2 million.

The island makes apparels for companies such as Marks & Spencer Group Plc, Gap Inc. and Victoria’s Secret.

The central bank on Feb. 3 raised benchmark interest rates for the first time since 2007 to contain credit growth and inflation in the $50 billion economy, about a fifth of which is made up of exports.

The monetary authority has said it aims to curtail import- related credit to reduce the trade and current-account deficits, and ensure that inflation remains at the “mid-single digit levels” in the second half of 2012.

The nation is facing some balance of payments pressure, Governor Ajith Nivard Cabraal said in January.

Sri Lanka aims to double shipments abroad to $20 billion by 2020 from an estimated $10 billion in 2011 as it reconnects with global commerce after a 26-year civil war that ended in 2009.

--Editors: Sunil Jagtiani, Shamim Adam

To contact the reporter on this story: Anusha Ondaatjie in Colombo at anushao@bloomberg.net

To contact the editor responsible for this story: Hari Govind at hgovind@bloomberg.net


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