November 14, 2019
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    Trade deficit contracts in August as imports decline and exports recover Featured

    October 15, 2019

    Sri Lanka's trade deficit contracted in August 2019 after widening significantly in the previous month as the imports continued to decline and the exports recovered from its dip in the previous month, the Central Bank reported Monday in its External Sector Performance review for the month.Import expenditure recorded a decline of 16.6 percent (year-on-year) and export earnings declined fractionally by 0.4 percent (year-on-year) in August 2019.The trade deficit fell to US$ 540 million in August 2019 compared to the deficit of US$ 717 million recorded in August 2019.

    Earnings from merchandise exports declined 0.4 percent in August 2019 to US$ 1.033 billion compared with US$ 1.037 b million in August 2018 mainly due to decline in agricultural exports while industrial exports grew supported by higher earnings from textiles and garments.Expenditure on imports declined in August 2019 for the tenth consecutive month by 16.6 percent to US$ 1.574 billion from US$ 1.887 billion a year ago.

    Cumulatively in the first eight months of the year YOY export earnings increased by 2.4 percent to US$ 8.031 billion from US$ 7.842 billion while import expenditure declined by 14.6 percent to US$ 12.286 billion from US$ 15.083 billion in 2018.During the first eight months of 2019, the cumulative deficit in the trade account contracted to US$ 4.854 billion from US$ 7.24 billion recorded in the corresponding period of 2018.

    Earnings from tourism were estimated at US$ 270 million in August 2019, in comparison to US$ 376 million in August 2018. In cumulative terms, earnings from tourism were estimated at US$ 2.38 billion declining 19.9 percent during the first eight months of 2019 compared to US$ 2.971 billion during the corresponding period of 2018.

    Workers' remittances at US$ 518 million in August 2019 declined 3.0 percent (year-on-year). On a cumulative basis, workers' remittances amounted to US$ 4.414 billion during the first eight months of 2019 recording a decline of 7.6 percent over the corresponding period in the previous year.

    There were notable foreign project loan inflows to the government in August 2019, while foreign investments in the CSE and government securities market recorded net outflows in August 2019.The Sri Lankan rupee appreciated by 3.0 percent against the US dollar during the year up to 20 August 2019.The gross official reserves stood at US$ 8.5 billion by end August 2019, which was equivalent to 5.1 months of imports.

     

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