Tourism and remittances top US $ 7bn in 2012

13 February 2013 04:58 am - 2 - {{hitsCtrl.values.hits}}

A A A

In 2012, earnings from tourism and remittances reached a record high of US $ 1,039 million and US $ 5,985.3 million respectively reducing the current account deficit of the Balance of Payment (BoP) substantially, according to the data released by the Central Bank..

As a result, the Central Bank expects to reduce the current account deficit of the BoP to US $ 3.3 billion or 5.5 percent of GDP in 2012 from 7.8 percent in 2011. Further the BoP is also expected to turn into a US $ 100 million surplus improving from the deficit of US $ 1,061 million in 2011.

Since the end of the armed conflict in May 2009, the tourism earnings have been continuously improving and in 2011 it peaked US $ 830.3 million. However the increasing tourism arrivals which peaked at 1 million in 2012 fail to boost the bottom lines of the star class hotels in the country. This was amply demonstrated by the recently released Q3 results of John Keells Hotels’ bottom line denting by as much as 22 percent.

This was further proved by the latest research carried out by Capital Alliance on the country’s hospitality sector which is losing appeal in the minds of the tourists due to failure to deliver value for money.

Meanwhile the workers’ remittances which have so far come to the rescue of the current account of the BoP increased the earnings from US $ 5,144.8 million in 2011 to little less than US $ 6,000 million.

It is unlikely that the government will take any measures to disturb this encouraging trend despite recent calls from various quarters to ban the practice sending of Sri Lankan women to Middle Eastern countries as house maids.

This is particularly true at a time when the Central Bank strives to increase the remittances share of the GDP to at least 14 to 15 percent from the existing 10 percent level within the next 4 years. According Ajith Nivard Cabraal, the Governor of the Central Bank, the high level of inflows on account of emerging services such as export of software and information technology enabled services also helped to buttress the current account substantially. The ICT/BPO industry which is among the top five export revenue earners accounts for over US $ 600 million annually.

Meanwhile the capital & the financial account of the BoP also saw substantial foreign currency inflows. Foreign investments at the Colombo Stock Exchange (Portfolio investments) peaked US $ 305 million against the net outflow of US $ 171 million in 2011.

There has been a significant increase in foreign investments in government securities, with net inflows to treasury bills and treasury bonds during 2012 amounting to US $ 843 million compared to the net inflow of US $ 233 million in 2011.

Further, long-term loans obtained by the government during 2012 amounted to US $ 2,869 million, while long-term borrowings by commercial banks during 2012 amounted to US $ 973 million.

Meanwhile the Foreign Direct Investments which were materialized for the full year will not be available until March, for the first nine months the figure stood at US $ 615 million including foreign loans obtained by Board Of Investment (BOI) companies.

Nevertheless Mirror Business exclusively reported in January, the total for the year was US $ 1.2 billion quoting the ex-chief at the BOI.

Gross official reserves amounted to US $ 6,877 million by end 2012, while total international reserves which include gross official reserves and foreign assets of commercial banks, amounted to US $ 8,358 million by end 2012. In terms of months of imports, gross official reserves were equivalent to 4.3 months of imports by end 2012, while total reserves were equivalent to 5.3 months of imports.

Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

Comments - 2

doctor doc Wednesday, 13 February 2013 12:00 AM

its a sad state of affairs when the biggest foreign exchange earnings for our country come from domestic worker remittances..who the hell are u trying to fool boss? via DM Android App

SENALI WADUGE Thursday, 14 February 2013 09:46 AM

tourism may radically go down after the implementaion of NON-HALAL food . otherwise tourist must bring their own food.

Add comment
Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Tourism and remittances top US $ 7bn in 2012

Comments - 2

Add comment

RECOMMENDED

‘Spike in blast fishing’ poses renewed threats to Sri Lanka’s marine ecosystems

UDA owned land in Thalawathugoda; UDA Minister Prasanna Ranatunga under the spotlight for forceful occupation of reserved land

Loss-making SMIB faces political pressure in recovering loans

Baltimore Bridge Collapse: MV Dali, SL authorities anchored in mystery?

Has Sri Lanka become a potential hub for the illegal wildlife trade?

Spotlight on Moragahakanda Development Project Moragolla villagers lose livelihoods and down to one meal a day

Ambitious Sri Lankan jobseekers ‘trafficked into Ukraine war zones’

Most Viewed in News

Street food vendor arrested for verbally harassing foreigner

SL on alert on possible genocide allegations by Canada

Racing event tragedy leaves seven dead including eight-year-old child

Two racing drivers arrested over Fox Hill tragedy

Ranil Wickremesinghe caravan moves on despite barking dogs

Complaint lodged over Piumi Hansamali's possession of Gota’s Range Rover

MIRROR CRICKET

Is Chamari Athapaththu Sri Lanka’s greatest cricketer ever?

Athapaththu back atop ICC Women’s ODI Batting Rankings

Chamari Athapaththu sets big goal for T20 World Cup

How does CSK get best out of Pathirana?

TODAY'S HEADLINES

No footboard riding allowed, no liability for accidents: Railways Department

Six patients claim Rs.600 million from Keheliya and others for permanent loss of sight

SLPP, UNP initiates action for forming broad alliance

Here is the way!

Pakistan lose key players for last two T20Is against New Zealand

Sri Lanka secures third spot in South Asian Kurash Championship 2024

Athapaththu back atop ICC Women’s ODI Batting Rankings

Army forms committee to probe Diyatalawa Fox Hill Supercross accident