Sri Lankan Economy
- Exports: October 2016 data for exports indicated a very marginal growth of 0.9% on year-on-year basis. Exports of textile and garments, rubber products and food and beverages saw gains while tea saw a decline in October 2016 compared to the same period in 2015.
- Imports: Expenditure on imports increased by 16.4% on year-on-year basis in October 2016. This sharp increase in import expenditure was mainly due to the importation of a dredger vessel by CHEC Port City Colombo (Pvt) Ltd, which was categorized under investment goods. Excluding this, expenditure on imports increased by only 5.2%. Import expenditure on food and beverages, fuel, building materials, machinery and transport equipment recorded an increase in October 2016 on year-on-year basis.
- Balance of Payments (BOP): October 2016 data indicated, the trade balance deteriorated by 33%, tourist arrivals registered a significant growth of 14% and workers’ remittances increased marginally by 0.4% compared to the same period in 2015.
- Credit Growth: Growth in credit to private sector remained high at 21.9% by end 2016 and has fairly eased from the peak of 28.5% observed in July 2016.
- Inflation: CCPI inflation increased to a six-month high of 5.5% on year-on-year basis amid the base year revision and NCPI inflation is accelerated to a two year high of 6.5% on year-on-year basis in January 2017.
The Global Economy
- Global Growth Forecast: As per the latest projections of the World Bank, the forecast for global economic growth is 2.7% in 2017 from a sluggish rate of 2.3% in 2016.
- Trade: The WTO’s World Trade Outlook Indicator predicts that global trade will continue to build moderately in the Q1 of 2017.
- Asia: Asian exports have strengthen considerably in recent months, providing a boost to regional growth and Asian manufacturing growth is expanding at its fastest for four years, in the sign of improving health of emerging markets.
- China: According to the latest World Bank projections, economic growth is projected to moderate to 6.5% in 2017. This outlook reflects soft external demand, heightened uncertainty about global trade and slower private investment.
- US: The economy continues along the same moderate growth path it has experienced in its recovery from the Global Financial Crisis.
- Trade Facilitation Agreement: The WTO Trade Facilitation Agreement (TFA) came into force yesterday, with the ratification of two-thirds of WTO members. The TFA will improve trade efficiency worldwide, encouraging economic growth by cutting red tape at borders, increasing transparency and taking advantage of new technologies.