Sri Lanka achieves record exports in 2017

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

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 percent and fisheries 40 percent. Tea benefitted from higher prices and enhanced access to Middle Eastern markets, particularly, Iran. Fisheries benefitted from both the lifting of the EU ban in June 2016 and the GSP Plus concession in May 2017. 

Apparel which accounts for over 40 percent of all goods exports and employs over 300,000people directly, mostly women, recorded a modest 2 percent growth over 2016. However it is encouraging that the past 4 months showed 10 percent year-on-year growth as new orders from the EU were secured due to the GSP Plus benefit of 12 percent 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 US$ 3.7 billion of exports, an increase of 8 percent compared to 2016. The growth in services in 2017 was significant compared to the year 2016 where ICT/BPM grew at 7.7 percent and logistics at 5 percent.

Furthermore, ICT/BPM companies are expected to show a double digit growth next year with thebudget support for IT SMEs to be executed in 2018,while benefiting from grant schemes for innovation and entrepreneurship. In addition the 40 percent 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 organisation 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 enhancementof 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 06 focus sectors are: IT, spices & concentrates, boating industry, wellness tourism, processed food and beverages and electrical and electronic components and 04 trade support functions; trade information and promotion, national quality infrastructure, innovation and R&D and logistics, which 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 and 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 300million 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$ 22 billion from merchandise and services exports by 2020.”