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% and fisheries ~40%.
Tea benefited from higher prices and enhanced access to Middle Eastern markets, particularly, Iran. Fisheries benefited from both the lifting of the EU ban in June 2016 and the GSP+ concession in May 2017.
Apparel which accounts for over 40% of all goods exports and employs over 300,000 people directly, mostly women, recorded a modest 2% growth over 2016. However it is encouraging that the past 4 months showed ~10% year-on-year growth as new orders from the EU were secured due to the GSP+ benefit of 12% 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 $3.7bn of exports, an increase of 8% compared to 2016. The growth in services in 2017 was significant compared to the year 2016 where ICT/BPM grew at 7.7% and logistics at 5%. Furthermore, ICT/BPM companies are expected to show a double digit growth next year with the budget support for IT SMEs to be executed in 2018, while benefiting from grant schemes for innovation and entrepreneurship. In addition the 40% foreign ownership restriction will be removed from freight forwarding to facilitate investment into the sector.