Sri Lanka Achieves Record Exports in 2017

* Exports in 2017 tops US$ 15bn, up 10% from year earlier
* Government policy on shifting to export driven growth continues through the trade agreement negotiations underway and EDB initiatives


Minister of Development Strategies and International Trade Malik Samarawickrama

21st January 2018

Sri Lankan merchandise exports grew to an all time record of over US$11.4bn in 2017, surpassing the previous high of US$11.1bn achieved in 2014. Once, again the EU and the USA were our biggest markets taking ~US$3bn each. The sectors showing particularly strong year-on-year growth were tea ~20% and fisheries ~40%. Tea benefited from higher prices and enhanced access to Middle Eastern markets, particularly, Iran. Fisheries benefited from both the lifting of the EU ban in June 2016 and the GSP+ concession in May 2017. the Ministry of Development Strategies and International Trade said.

Apparel which accounts for over 40% of all goods exports and employs over 300,000 people directly, mostly women, recorded a modest 2% growth over 2016. However it is encouraging that the past four months showed ~10% year-on-year growth as new orders from the EU were secured due to the GSP+ benefit of 12% duty exemption. 2018 is expected to be a strong year for the apparel manufacturers.

Services exports comprising ICT/BPM, logistics, financial services and construction contributed an additional $3.7bn of exports, an increase of 8% compared to 2016. The growth in services in 2017 was significant compared to the year 2016 where ICT/BPM grew at 7.7% and logistics at 5%. Furthermore, ICT/BPM companies are expected to show a double digit growth next year with the budget support for IT SMEs to be executed in 2018,while benefiting from grant schemes for innovation and entrepreneurship. In addition the 40% foreign ownership restriction will be removed from freight forwarding to facilitate investment into the sector.

The Export Development Board (EDB), under the Ministry of Development Strategies and International Trade, is Sri Lanka’s apex organization for the promotion and development of exports. Commenting on the landmark 2017 performance, EDB Chairperson, Indira Malwatte said, "Our export results are particularly noteworthy given the global trading environment. Our peer nations have experienced material declines in trade in the past year, while Sri Lanka has maintained growth. This is a testament to the tenacity of our exporters and the relentless enhancement of their value proposition to customers."

The EDB has been championing the National Export Strategy (NES) in collaboration with the International Trade Centre to develop the future export sectors. The main strategies on six focus sectors; IT, Spices & Concentrates, Boating Industry, Wellness Tourism, Processed Food & Beverages and Electrical & Electronic components and four Trade Support Functions; Trade Information & Promotion, National Quality Infrastructure, Innovation and R&D and Logistics, will create the conditions of success for high potential growth sectors that can deliver leading exporters of tomorrow. The vision of the EDB to "Position Sri Lanka as a Prominent Export Hub for Innovative Products & Services" is well aligned with the development vision of the Government to reorient economic policy towards exports- and investment-driven growth, rather than debt-funded public infrastructure spending.

Minister of Development Strategies and International Trade Malik Samarawickrama said, "We are signing the Free Trade Agreement (FTA) with Singapore later this month. This sophisticated FTA will give a signal to the world that Sri Lanka is ready to engage in global value chains and production sharing networks. The trade agreements currently under negotiation with China, and India will give our exporters preferential access to a middle class market of 300 million people – the same size as the whole of the EU. These trade agreements will be a key pillar in our quest to reach foreign exchange earnings of US$22bn from merchandise & services exports by 2020."

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