Earnings from tourism are growing as arrivals surge with Sri Lanka aiming to reach 2.5 million tourists by 2016.
According to the Central Bank (CB) first quarter 2014 data, arrivals grew by 39.5 per cent to 112.631 in April 2014. while earnings from tourism in March and April increased by 26.2 per cent and 49.8 per cent, year-on-year. to US$192.2 million and US$162.7 million respectively
The five main source markets in March were India, UK, Germany ,China and Russia, accounting for about 44 per cent of total tourist arrivals during the month.
On other developments, the CB said favourable developments in the external sector continued in March with a noticeable contraction in the trade deficit. On a cumulative basis, earnings from exports recorded a notable increase, while import expenditure witnessed a moderate growth reducing the trade deficit substantially during the first quarter of 2014. “As a result of an increase in inflows from workers’ remittances, along with the significant growth in earnings from tourism, the current account deficit in the first quarter of 2014 is expected to have narrowed substantially.” the report said.
The CB said earnings from exports increased significantly by 28.6 per cent, year-on-year to US$1,070 million in March; the highest monthly export value ever recorded Expenditure on imports increased by 8.2 per cent to $1,672 million in March. Accordingly, the cumulative trade deficit during the first three months of 2014 contracted by 13.5 per cent, year-on-year, to US$1,862 million.
The CB said significant expansion in all major export categories contributed to the high growth in exports in March with the largest contribution to overall growth coming from industrial exports, which grew by 25.7 per cent to US$779 million. As the leading driver of the growth in industrial exports, earnings from export of textiles and garments grew by 32.6 per cent, year-on-year, to US$457 million in March reflecting significant increases in exports to both traditional and non-traditional markets.
Export earnings from tea increased by 20.3 per cent to US $155 million, recording a historically high monthly value, the report said.
Import expenditure on consumer goods increased by 18.5 per cent, year-on-year, to US$303 million in March, reflecting increases in both food and non-food consumer goods imports. Import of food and beverages increased by 8.9 per cent, due to a substantial increase in import expenditure on milk powder and sugar, on account of the increase in the price of milk powder and sugar in the international market.
Workers’ remittances during first three months of this year grew by 12.2 per cent to US$1,663.4 million from US$1.483.1 million in the corresponding period in 2013. Driven by an increase in labour migration in the professional and skilled categories.