The Manufacturing Sector PMI decreased to 57.6 index points in June 2018 from 60.6 index points observed in the previous month and was in line with the pattern observed in the previous years. The significant drop in Production especially that of manufacturing of food, beverages and tobacco products largely contributed for this decrease. Further, New Orders and Stock of Purchases also decreased during the month. However, the overall Employment increased with the new recruitments in manufacturing of textiles, wearing apparel, leather and other related products. Meanwhile, the time taken by the suppliers to deliver materials increased due to unfavourable weather conditions prevailed during the month and the tightened environmental regulations in China. As a result, the Suppliers’ Delivery Time lengthened.

The Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 05 July 2018, decided to maintain policy interest rates at their current levels. Accordingly, the Standing Deposit Facility Rate (SDFR) and Standing Lending Facility Rate (SLFR) remain at 7.25 per cent and 8.50 per cent, respectively. The Board’s decision is consistent with stabilising inflation at mid-single digit levels in the medium term, thereby contributing to a favourable growth outlook for the Sri Lankan economy.

Sri Lanka’s external sector strengthened in April 2018 with continuous inflows to the financial account of the balance of payments (BOP) despite the mixed performance demonstrated in the current account. Higher inflows to the financial account, particularly with the proceeds of the 12th international sovereign bond (ISB) issuance, project loans and FCBU loans and foreign investment in the Colombo Stock Exchange (CSE) and the government securities market, resulted in gross official reserves reaching the historically highest level of US dollars 9.9 billion as at end April 2018. In terms of the current account, the trade deficit expanded in April 2018 as import expenditure increased at a higher pace while export earnings remained subdued. However, tourist earnings and workers’ remittances continued to record a healthy growth during the month.

The sole responsibility of compiling Gross Domestic Product (GDP) estimates is vested with the Department of Census and Statistics (DCS) since 2007. However, the Central Bank of Sri Lanka (CBSL) has observed media statements by interested parties, in relation to the involvement of CBSL in manipulating GDP estimates of the country, misleading the general public.