The external sector performance was driven by a double digit growth in exports (yearon-year) in September 2017, surpassing the US dollars 1 billion mark of monthly exports for the third consecutive month. However, the trade deficit expanded with higher imports of fuel and rice during the month. Earnings from tourism declined moderately during the month with a slightly lower number of tourist arrivals from key destinations compared to September 2016. The moderation in workers’ remittances continued in September, resulting in a noteworthy decline in workers’ remittances in the first nine months of 2017. However, reflecting continuous investor confidence, the financial account of the Balance of Payments (BOP) continued to strengthen during the month with higher foreign inflows to the Colombo Stock Exchange (CSE) and the government securities market.

The Manufacturing Sector PMI recorded 54.8 in October which is a decrease of 4.2 index points compared to September 2017. This indicates that the Manufacturing activities expanded at a slower pace in October compared to September 2017. This was mainly driven by the New Orders and Employment sub-indices which moderated from the levels of increase observed in the previous month. The Production and Stock of Purchases sub-indices also expanded at slower rates in October. Meanwhile, the Suppliers’ Delivery Time sub-index lengthened at a higher rate which was led by lengthening of delivery time of overseas suppliers due to the high demand for their supplies from other countries. Overall, all the sub-indices of PMI recorded values above the neutral 50.0 threshold signalling an overall expansion in October 2017, but at a slower pace than the previous month. Moreover, the Expectation for activities remain positive for the next three months.