Aug 01, Colombo: The International Monetary Fund has urged Sri Lanka to woo Asian markets to boost its declining export earnings to support the economic growth.

Koshy Mathai, the IMF resident representative for Sri Lanka and Maldives has advised Sri Lanka to focus on enhancing trade with India and China to take advantage of those growing Asian economies and to diversify against shocks coming from economic slowdowns in other parts of the world.

Despite having a successful free trade agreement with India since 1998 Sri Lanka's total exports in 2011 to India accounted for just 4.9 percent while exports to China accounted for only around 1 percent.

"Failing to take advantage of the opportunities provided by the economic growth by those areas (in China and India) today would be ashamed, would definitely be giving up an opportunity for Sri Lanka to go forward," a Reuters report quoted Mathai as saying at an exporter forum in Colombo on Tuesday.

Sri Lanka's exchange rate, high electricity prices and rigid labor laws could all account for the slowdown in export growth, he has said.

Sri Lanka's earnings from industrial exports recorded n year-on-year decline of 15.1 percent in May 2012. A major contributor to earnings, exports from textiles and garments, declined by 13.5 percent in the month.

"We are not going to have economic success if we continue having exports declining relative to the size of economy. It is only with export growth, that the Sri Lankan economy is going to go forward," Mathai has told the forum.

European Union and the United States are Sri Lanka's largest export partners accounting for 60 percent of Sri Lanka's exports. With the economic crisis in those regions, Sri Lanka's export earnings have declined 5.4 percent in the first five months of this year compared to the same period last year.

The International Monetary Fund (IMF) lowered the economic growth forecast for Sri Lanka to a 6.75 percent this year, slower than the 7.2 percent projected by the country's Central Bank.

Sri Lanka has recorded an impressive 8.3 percent economic growth for the year 2011. However, the Central Bank lowered the projected growth to 7.2 percent this year due to the rising global fuel prices.