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Friday, 29 January 2016 08:53

Sri Lanka trade deficit contracts significantly by 13.2 percent in November 2015 as imports fall

Sri Lanka trade deficit contracts significantly by 13.2 percent in November 2015 as imports fall

Sri Lanka's trade deficit contracted significantly by 13.2 percent to US$ 630 million in November 2015 from US$ 726 million a year earlier, due to the decline in import expenditure at a higher rate than the reduction in export earnings, according to the Central Bank data released in its External Sector Performance Review Thursday.

 

According to Colombo Page, despite the slowdown in imports during the recent months, however on a cumulative basis, the trade deficit during the first eleven months of 2015 increased marginally by 1.0 percent to US$ 7.57 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.

For the ninth consecutive month since March 2015, year-on-year export earnings dropped by 9.3 percent to US$ 835 million in November 2015, reflecting lower earnings from exports.

Decline in tea, rubber products, petroleum products and garments exports due to weak global demand 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 21.1 percent, year-on-year in November 2015.

On a cumulative basis, earnings from exports declined by 4.4 percent to US$ 9.68 billion during the first eleven months of 2015.

Expenditure on imports also declined by 11.0 percent, year on year, to US$ 1.465 billion in November 2015 mainly due to the reduction of fuel imports, which declined by 27.9 percent in November.

On a cumulative basis, expenditure on imports during the first eleven months of 2015 decreased by 2.1 percent to US$ 17.24 billion.

Workers' remittances declined by 7.2 percent, year-on-year, to US$ 574.5 million in November 2015 from US$ 619.3 million recorded in November 2014. The cumulative inflow from workers' remittances increased marginally by 0.8 percent to US$ 6.36 billion during the first eleven months of 2015 in comparison to the corresponding period of 2014.

The cumulative earnings from tourism increased to US$ 2.86 billion during 2015 compared to US$ 2.43 billion recorded during 2014.

Sri Lanka's gross official reserves as at end November 2015 amounted to US$ 7.3 billion.

The Sri Lankan rupee depreciated against the US dollar by 9.03 percent during 2015. During 2016 up to 27 January 2016, the rupee appreciated by 0.1 percent against the US dollar.

SS

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