Sri Lankan Economy
- Exports: In June 2017, export earnings expanded for the fourth consecutive month, registering a 10% Y-o-Y growth. The largest contribution for this growth was from industrial exports (77%) followed by agricultural exports (21%).
- Imports: In June 2017, expenditure on imports declined for the first time since September 2016, registering a Y-o-Y decline of 8%, largely contributed by intermediate goods (87%); (mainly by lower imports of fuel), followed by consumer goods and Investment goods.
- Trade Balance: The deficit in the trade balance contracted in June 2017 on Y-o-Y basis due to increase in exports and decline of imports. The cumulative trade deficit during the first half of 2017 increased on Y-o-Y basis due to increase in imports.
- Inflation: In July 2017, both CCPI and CCPI core inflation slowed to 4.8% (from 5.8%) and 4.9% (from 5.0%) on Y-o-Y basis. The NCPI inflation increased to 6.3% (from 5.8%) and NCPI core inflation slowed to 4.2% (from 6.8%) on Y-o-Y basis.
- Credit Growth: Growth in credit to the private sector decreased to 18.6% in June 2017, for the third consecutive month showing the results of CBSL policy rate tightening.
- Global Oil Prices: Global oil prices increased by 4% in July 2017 to USD 46.93 per barrel on month-on-month basis, after two consecutive months of sharp declines. At the latter part of August, oil prices increased further by 9% on month-on-month basis.
- Global Trade: As per the World Trade Outlook Indicator of the World Trade Organisation, global merchandise trade will continue to strengthen in the third quarter of 2017.
- China: IMF warns that China’s debt boom could lead to financial crisis. Growth in China has been propelled up by rapid increases in debt in recent years and the nominal credit to the non-financial sector more than doubled in the last five years. As per the IMF, this may increase the risk of disruptive adjustments and market growth slowdown.
- US: US home prices keep climbing as inventories sit at historic lows due to construction lags. Housing prices rose by 5.8% in 12 months to June and stand at 4.3% higher than the pre-crisis peak, according to a national Home Price Index of US.