Purchasing Managers' Indices for both Manufacturing and Services activities expanded in September
Manufacturing activities expanded at a higher rate in September 2020, compared to August 2020. This expansion in manufacturing PMI was mainly attributable to the increase in Production and New Orders, especially in manufacturing of food & beverages and textiles & wearing apparel sectors.
Sri Lanka’s external sector continued to recover in relation to many aspects during August 2020, mainly supported by an improved trade deficit and a notable increase in workers’ remittances. The trade deficit improved on a year-on-year basis, with the reduction in merchandise imports due to regulatory restrictions on the importation of non-essential goods and lower crude oil prices, despite earnings from merchandise exports recording a year-on-year decline during the month. Nevertheless, the export performance remained strong for the third consecutive month in spite of the pandemic affected global demand. Meanwhile, workers’ remittances recorded a substantial growth in August 2020, strengthening the current account.
The National LANKAQR Initiative “ රට පුරාම (Rata Puraama) LANKAQR” was launched on 5th October 2020 at the Central Bank of Sri Lanka (CBSL) by Hon. Dr. Bandula Gunawardena, Minister of Trade as the Chief Guest, in the presence of Hon. Ajith Nivard Cabraal, State Minister of Money & Capital Market and State Enterprise Reforms, Hon. Lasantha Alagiyawanna, State Minister of Co-operative Services, Marketing Development and Consumer Protection, Hon. Shehan Semasinghe, State Minister of Samurdhi, Household Economy, Micro Finance, Self-Employment, Business Development and Underutilized State Resources Development, Governor of the CBSL, Deshamanya Prof. W D Lakshman, Members of the Monetary Board including Mr. S.R. Attygalle, Secretary to the Treasury, Ministry of Finance.
On 02 October 2020, the Central Bank of Sri Lanka successfully completed the settlement of the maturing International Sovereign Bond of US dollars 1 billion along with the due coupon payments, on behalf of the Government of Sri Lanka.
Headline inflation as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2013=100) marginally decreased to 4.0 per cent in September 2020 from 4.1 per cent in August 2020. This was driven by the statistical effect of the high base prevailed in September 2019. Food inflation (Y-o-Y) decreased to 11.5 per cent in September 2020 from 12.3 per cent in August 2020, whereas Non-food inflation (Y-o-Y) increased to 0.9 per cent in September 2020 from 0.8 per cent in August 2020.
The change in the CCPI measured on an annual average basis also decreased to 4.7 per cent in September 2020 from 4.8 per cent in August 2020.
Following the announcement by Moody’s Investors Service downgrading Sri Lanka’s Sovereign rating, the Ministry of Finance has issued a response, which can be found on the link below:
“Sri Lanka Socio Economic Data – 2020”, the annually published data folder of the Central Bank of Sri Lanka, is now available for public information. The current data folder is the 43rd volume of the series.
This easy-to-carry booklet contains information categorised under 14 topics, namely, Country Profile; Key Economic Indicators; Country Comparisons; Socio Economic Conditions; Human Resources; National Accounts; Agriculture; Industry; Economic and Social Infrastructure; Prices and Wages; External Trade and Tourism; External Finance; Government Finance; and Money Banking and Finance.
Headline inflation as measured by the year-on-year (Y-o-Y) change in the National Consumer Price Index (NCPI, 2013=100) increased marginally to 6.2 per cent in August 2020 from 6.1 per cent in July 2020. This was driven by the monthly increases in prices of items in both Food and Non-food categories. Meanwhile, Food inflation (Y-oY) increased to 13.2 per cent in August 2020 from 12.9 per cent in July 2020, whereas Non-food inflation (Y-o-Y) increased to 1.1 per cent in August 2020 from 1.0 per cent in July 2020.
Purchasing Managers' Indices for both Manufacturing and Services activities expanded in August 2020.
Recovery of manufacturing activities continued in August 2020 as reflected by PMI, benefitting from the normalisation of business activities in the country. Both New Orders and Production sub-indices remained at expansionary levels in August 2020 while a noticeable development was observed in Employment sub-index.
Sri Lanka’s external sector recovered further in July 2020 supported by an increase in merchandise exports and increased workers’ remittances amidst reduced merchandise imports. Several notable achievements were observed in spite of the COVID-19 pandemic. Earnings from merchandise exports surpassed US dollars 1 billion in July for the first time since January 2020 and recorded a positive year-on-year growth for the first time since February 2020. As expected, merchandise imports remained subdued with the continuation of restrictions imposed on the importation of non essential goods. A substantial increase was observed in workers’ remittances in July 2020, recording the highest amount of monthly remittances since January 2018.
