Sri Lanka received US $ 537 million worth Foreign Direct
Investments (FDIs) in the first half of 2013, CeyNews reported. Sri
Lanka has set a FDI target of US $ 2 billion for 2013. In 2012, Sri Lanka
received US $ 1.34 billion in FDIs, falling short from a target of US $ 1.5
billion. Meanwhile, net inflows to the stock market and commercial banks
in the first half stood at US $120.2 million and US $ 664.3 million
respectively. Net inflows to the government securities market amounted to US $
664.4 million. Sri Lanka targets FDIs to be at least 2 percent of GDP
for the next 4 to 5 years.
Notable
inflows to the financial account include FDI inflows amounting to $ 537.0
million, net inflows to the stock market of $ 120.2 million, net inflows to the
Government securities market amounting to $ 664.4 million and inflows to
commercial banks of $ 664.3 million during the period. Such inflows display
that foreign investors’ confidence in Sri Lanka has remained unchanged despite
the volatility caused by global markets reacting to prospects of the tapering
of quantitative easing by advanced economies,” the Central Bank said in its
statement following the August Monetary Policy review. It also said that in the
external sector, merchandise exports in June 2013 have showed some turnaround,
recording a positive year-on-year growth after the decline observed in the past
15 months.
Meanwhile,
imports have also inched up in June (year-on-year), driven partially by the
importation of certain one-off items, expanding the trade deficit during the
month. However, the cumulative performance in merchandise trade depicts a
salutary 7.1% decline in the trade deficit for the first six months of 2013.
Earnings from tourism and workers’ remittances have continued to improve,
whilst financial inflows have been substantial in the first half of the year. Central
Bank stated that the recent global developments have been reasonably
encouraging with the US economy and the Eurozone showing signs of economic
recovery in the second quarter of the year.
“The positive developments in advanced economies, if continued, would augur well for domestic economic growth as a result of a stronger performance of the external sector. At the same time, however, the wide fluctuations of currencies of trading partners and competitors in the international market would need to be closely monitored in order to address any adverse effects on Sri Lanka’s external balance in the period ahead,” the Central Bank added.
