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Friday, 08 January 2016 15:29

Sri Lanka trade deficit contracts by 6.8 percent in October 2015 as exports and imports fall

Sri Lanka trade deficit contracts by 6.8 percent in October 2015 as exports and imports fall

Sri Lanka's trade deficit contracted by 6.8 percent to US$ 791 million in October 2015 from US$ 765 million a year earlier, according to the Central Bank data released in its External Sector Performance Review Thursday.

 

Despite the slowdown in imports during the recent months, however on a cumulative basis, the trade deficit during the first ten months of 2015 increased by 2.5 percent to US$ 6.936 billion, the Bank said.

Central Bank attributed the expansion in the cumulative trade deficit mainly to the subdued export performance as a result of depressed global demand.

Export earnings dropped by 6.0 percent to US$ 847.3 million in October 2015, reflecting a year-on-year decline for the eighth consecutive month since March 2015 reflecting lower earnings from exports of all major categories mainly due to weak global demand.

Tea, rubber products and garments exports contributed largely to the overall decline in exports.

The continued decline in demand for tea from Russia and the Middle East mainly caused export earnings to decline significantly by 11.2 percent, year-on-year in October 2015.

On a cumulative basis, earnings from exports declined by 3.9 percent to US$ 8.843 billion during the first ten months of 2015.

Expenditure on imports also declined by 6.4 percent, year on year, to US$ 1.638 billion in October 2015 mainly due to the reduction of fuel imports, which declined by 30.5 percent in October.

On a cumulative basis, expenditure on imports during the first ten months of 2015 decreased by 1.2 percent to US$ 15.78 billion.

Earnings from tourism grew by 20.4 percent (year-on-year) to US$ 229.5 million in November 2015, while earnings during the first eleven months are estimated to have increased by 18.1 percent to US$ 2.535 billion in comparison to US$ 2.147 billion recorded during the corresponding period of 2014.

Foreign exchange inflows from workers' remittances increased marginally by 0.8 percent to US$ 605.1 million compared to US$ 600.1 million in October 2014. During the first ten months of the year workers' remittances grew by 1.7 percent to US$ 5.787 billion from US$ 5.689 billion in the corresponding period of 2014.

Sri Lanka's gross official reserves stood at US$ 6.5 billion as at end October 2015.

The Sri Lankan rupee has depreciated by 9.03 percent against the US dollar up to December 31, 2015.

SS

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