The Export Development Board (EDB), expressing its concern about the resurgence of COVID-19 in main markets, has called on the private sector to plan and prepare as it is threatening to impact trade once again.
“We are quite concerned about the resurgence of COVID-19 in our major markets,” EDB Chairman Prabhash Subasinghe told the Daily FT.
He said the partial lockdowns in the European Union (EU) markets as well as in the UK were threatening to impact Sri Lanka’s exports in the last quarter of the year.
This caution comes despite exports having achieved near or over $ 1 billion per month performance between June and October proving the private sector resilience.
Sri Lanka’s single largest export market is the US, which accounts for 27% of total merchandise exports last year, while Europe accounts for 30%.
He was concerned that customers, particularly in Europe, may reduce consumption of items and the demand for imported goods would be low.
Cautioning the export community on possible disruptions in market access, Subasinghe called on the exporters to be mindful and agile and maintain a close customer base given the situation.
The EDB Chief, however, was optimistic about the resilience of the exporter community and reassured continuous support to the private sector.
As the Western Province is currently experiencing a quarantine lockdown due to the resurgence of COVID-19, he said as key Government institutions that encourage exports, the EDB and the Board of Investment (BOI) would extend their fullest support to continue export operations without disruptions.
“Despite the disruptions we may stumble upon with the resurgence of the virus, we have ensured that the export sector is up and running and credible. Our interest to trade with the world remains unchanged,” he pointed out.
Subasinghe stressed that the social stigma on resurgence of COVID-19 linked with the export community should be managed better, pointing out that the entire export workforce was contributing immensely to keep the economy steaming ahead by attracting the much-needed foreign exchange.
“This year we will certainly perform less than last year, but I do not think any of us expected such a strong recovery and stability in the sector, given the pandemic and its impact. We also must understand that we only cater to two markets, the US and Europe,” he added.
Originally, the EDB set a target of $ 18.5 billion for 2020, up from $ 16.14 billion achieved in 2019. However, considering the unprecedented disruption to the global economy and trade due to the COVID-19 pandemic, the EDB revised its 2020 exports forecast by a hefty 42% to $ 10.75 billion in April. As per the revised target EDB forecasts $ 7.53 billion in merchandise exports and $ 3.21 billion from service exports in 2020.
Sri Lanka’s total merchandise and service exports in 2019 were $ 16.14 billion, up by 1.44% from 2018 merchandise exports at $ 11.9 billion, up 0.13%, and service exports at $ 4.2 billion, up by 5.3% from 2018.
In comparison to its regional peers’ export value, Sri Lanka’s performance is very low. Vietnam exports were $ 242 billion in 2019; Thailand $ 249 billion, Singapore $ 441 billion and India $ 323 billion.
