Sri Lanka's trade deficit declines in October

Sri Lanka's trade deficit has declined for the second consecutive month in October, the Central Bank said Thursday (06) releasing its external sector performance review.

It stands at US dollars 7,590 million, having declined 1 per cent, year-on-year, from the corresponding period of 2011. Responding to policy measures adopted earlier in the year, expenditure on imports during the period January to October 2012 recorded a 4 per cent year-on-year decline and amounted to US dollars 15,754 million.

The main contributors to the decline in import expenditure included drop of imports of gold, fertilizer, and to some extent crude oil as crude oil was not imported during the month of October.

However the expenditure on crude oil was offset to a large extent by increased imports of refined petroleum products, the Central Bank noted.

Demand for Sri Lanka's exports also has declined due to the slow recovery of advanced economies in the world, particularly, Sri Lanka's two biggest markets, the US and the Europe.

Accordingly, earnings from agricultural as well as industrial exports declined by 6.6 percent, year-on-year, in the first ten months of 2012 to US$ 8.164 billion.

However, earnings from tourism and workers' remittances increased cushioning the losses in other sectors.