Another Export Target Destined to Be Missed?

Abstract

In a recent statement, Sri Lanka's Export Development Board (EDB) announced plans to secure USD 31.3 billion revenue from total exports (both goods and services) by 2027. The EDB expects to double goods export revenue from 2022’s USD 13.1 billion to USD 26 billion in 5 years – a yearly growth rate of 15%. Sri Lanka has a history of seemingly ambitious export targets being missed and subsequently downgraded, and these fresh export aspirations face potential skepticism. For instance, the government expected to double goods exports from USD 10.6 billion in 2011 to USD 20 billion by 2020. However, as of 2022, goods exports of Sri Lanka earned only USD 13.1 billion, and the country has failed miserably to reach its target. Given that Sri Lanka only managed a modest increase of less than USD 3 billion in its goods exports over a decade (2011-2022), the aspiration to double exports in just five years, amid a global economic downturn and the uncertainty created by the rivalry between major economies, appears overly ambitious. In fact, the EDB is already facing a setback, in only the first year of its 5-year plan. Contrary to its expectations, the goods exports in the first five months of 2023 fell by 8% compared to the same period in 2022. The goods exports target set for 2023 is USD 15.9 billion. The slowing down of exports, combined with the gloomy forecasts made by the apparel industry that accounts for over 40% of the country’s exports, will make it challenging for the EDB to meet its 2023 target.