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Sri Lanka’s lucrative tourism sector continues to enjoy sunshine earnings as returns rose 13.6% Year-on-Year (YoY) to generate a cumulative $ 762.3 million during the first quarter of 2015, the Central Bank said yesterday.
According to the monthly external report, earnings from tourism increased by 16.7% YoY in February and 18% YoY in March up to $ 263.5 million and $ 250 million respectively from the same period the previous year.
“Earnings were bolstered by strong improvements to arrivals figures, particularly from India and China in addition to improved arrivals figures from Sri Lanka’s other top three tourist markets, namely: the United Kingdom, Germany and France which together accounted for 94.2% of tourist arrivals in February,” the Central Bank said in its report.
Arrivals over the first quarter increased parallel to tourism earnings, recording 13.6% YoY growth to cross 478,838.
Sri Lanka’s tourist arrivals rose 8.5% in April compared to the same period last year, data released by the Sri Lanka Tourism Development Authority (SLTDA) showed this week.
The month recorded 122,217 tourists arriving in the country compared to the 112,631 that arrived in April 2014.
In the first four months of this year, 601,055 tourists visited the island, an increase of 12.5% compared to the 534,132 recorded for the same period in 2014.
Arrivals from North America rose 11.7% to 6,160 in April and the arrivals from the US were up 6.4% to 3,296 during the month. Tourist arrivals from Western Europe declined in April by 6.4% with 34,964 arriving during the month, compared to the 37,369 tourists who arrived in the same month last year.
Reversing the dip from last month, arrivals from Eastern Europe increased by 7.7% with the arrival of 11,675 tourists in April 2015. Arrivals from the Middle East rose 3.4% with 5,484 visitors arriving in April 2015.
Tourist arrivals from East Asia increased 31.9% as 24,292 visited the country compared to the 18,416 who visited in April 2014. Arrivals from China, compared to last year, increased 72.3% with the entry of 13,790 visitors.
Arrivals from South Asia increased by 17.7% as 32,907 tourists visited the island in April 2015. Of those arrived from South Asia, 23,048 were from India corresponding to an increase of 34.1%.
Sri Lanka exceeded its target of 1.5 million tourist arrivals last year and earned $ 2.206 billion from tourism. The trend is likely to continue, market experts said, to meet a target of 2 million tourist arrivals this year and 2.5 million by 2016.
Meanwhile, Sri Lanka’s external reserves strengthened with workers’ remittances increasing by 1.9% to $ 511.6 million from $ 502.0 million in February 2014.
During the first two months of 2015, workers’ remittances amounted to $ 1,035.2 million, declining marginally by 2.1% from $ 1,057.5 million during the same period of the previous year.
However, these remittances are expected to have increased at a higher rate during the national New Year, following the seasonal pattern of foreign revenue being remitted by Sri Lankans working abroad, the Central Bank said.
Sri Lanka’s February trade deficit widened by 10.4% to $ 638 million in comparison to the previous year, according to the Central Bank, pushing cumulative deficit in the first two months of 2015 to $ 1,410 million.
Earnings from exports increased by 5.8%, year-on-year, to $ 891 million in February 2015, led by industrial products, particularly textiles and garments.
Earnings from industrial exports, which represent about 77% of total exports, improved mainly due to increase in exports of textiles and garments followed by petroleum products, and gems, diamonds and jewellery.
Earnings from textiles and garments, which represent about 47% of total exports, increased by 6% during the month reflecting improved exports to both traditional and non-traditional markets, the Central Bank’s latest external report noted.
Meanwhile, earnings from agricultural exports recorded a marginal increase during the month, with significant increase in exports of spices and coconut products amidst the decline in exports of sea food and tea.
Spices exports recorded a significant growth reflecting substantial performance in pepper and cloves. Income from exports of coconut products increased mainly due to higher prices prevailed for coconut products along with the increased level of desiccated coconut and coconut oil exports.
However, seafood exports declined significantly due to restrictions on access to EU, the main market for Sri Lankan seafood products, from mid-January 2015. Tea export earnings continued to decline showing a notable drop in prices. The subdued demand from Russia, the main single export market for Sri Lankan tea, despite the higher demand from other main markets also contributed for this decline.
“Cumulative export earnings during the first two months of 2015 amounted to $ 1,801 million with an increase of 3.1% while the leading markets for merchandise exports of Sri Lanka were the USA, UK, India, Germany and Italy accounting for about 51% of total exports,” it said.
Expenditure on imports increased by 7.7%, year-on-year, to $ 1,530 million in February 2015, reflecting significant increase in consumer goods imports followed by investment goods.
For the first two months of 2015, long term loans obtained by the Government amounted to $ 140.6 million, which is a decrease of 31.4% from the comparable period in 2014. Meanwhile, foreign investments in government securities market registered an inflow of $ 20.9 million, on a net basis, by 6 May 2015.
The overall BOP is estimated to have recorded a deficit of $ 692.1 million during the first two months of 2015, compared to a surplus of $ 809.9 million recorded during the corresponding period of 2014.
Sri Lanka’s gross official reserves estimated to be $ 6.8 billion, equivalent to 4.3 months of imports as at end March. Meanwhile, the same is estimated to have increased to $ 7.4 billion by 30 April mainly with the proceeds of $ 400 million from the currency swap agreement between Sri Lanka and India.
Further, total foreign assets, which include gross official reserves and foreign assets of deposit taking corporations, amounted to $ 9.0 billion as at end February 2015, equivalent to 5.5 months of imports. The Central Bank of Sri Lanka observes that reserves are increasing since beginning of April 2015, reversing the declining trend experienced during the first quarter of the year.
