Energy bill $ 5 b in 2011

Sanjeevi Jayasuriya

Sri Lanka’s economy is confronted with the continuing large trade deficit underscoring the prevailing structural weaknesses in the national economy. The country still relies heavily on the importation of petroleum products for its energy needs which cost nearly US $ 5 billion in 2011, Treasury Secretary Dr P B Jayasundera told the Daily News.

“The petroleum importation is almost one fourth of total imports.

The economic recovery in the background of post conflict economic revival, the stable exchange rate and interest rate environment with low import taxes that prevailed during 2010 and 2011, fuelled the demand for motor vehicle imports,” he said.

The cost of imports increased to US $ 1,700 million in 2011 with the importation of 500,000 vehicles in comparison to US $ 1,000 million worth of vehicle imports in 2010, Dr Jayasundera said.

Import figures also indicate a continued reliance on the importation of food items and a significant increase in the importation of pharmaceuticals, dairy products, textile, sugar and a range of construction material such as cement, steel, furniture and machinery.

The exports recorded an impressive growth of 22 percent. However, the expansion in exports to emerging markets remained sluggish due to the traditional bias towards established markets.

“Targeting fast growing economies with specific export products should receive exporters’ attention.

Prospects for a higher export growth from high value added apparel, tea, rubber, coconut, spice products, IT and software, machinery and equipment, ceramics, gem and jewellery remained high,” Dr Jayasundera said.