Sri Lanka Trade Deficit Doubles During First Nine Months of 2010

01st December 2010, www.island.lk

The trade deficit doubled during the first nine months of this year with imports growing faster than exports, the Central Bank announced yesterday.

The trade deficit expanded 100.3 percent to US$ 4,039.14 million during the first nine months of this year from US$ 2,017.09 million in the corresponding period of 2009.

Total export earnings during this period increased by 11.4 percent to US$ 5,703.3 million from US$ 5,119.49 million the previous year.

Earnings from tea exports grew by 17.6 percent to US$ 995.84 million while total agricultural exports grew by 21.3 percent to US$ 1,454.56 million.

Industrial export earnings grew by 8.6 percent to 4,180.18 million with earnings from apparels declining 2.5 percent to US$ 2,343.39 million.

On a monthly basis, apparel export earnings grew by 10.8 percent in September to US$ 267.27 million. "Earnings from exports of textiles and apparels recorded higher earnings despite the withdrawal of GSP Plus concessions with effect from August. Garment exports to the EU increased by 1.5 percent while exports to the US increased by 13.4 percent," the Central Bank said.

Mineral exports declined by 1.1 percent to US$ 68.32 million.

Total expenditure on imports grew much faster than export earnings.

Imports grew by 36.5 percent to US$ 9,742.44 million during the first nine months of this year from US$ 7,136.59 million a year ago.

Consumer goods imports increased by 45.1 percent to US$ 2,064.79 million with the food and beverages imports bill increasing by 40.1 percent to US$ 1,261.19 million on higher milk powder and sugar prices.

Intermediate good imports increased by 38.7 percent to US$ 5,402.13 with petroleum imports growing by 57.7 billion to US$ 2,249.25.

Investment good imports increased by 22.6 percent to US$ 2,119.51 million with transportation goods increasing by 101.8 percent to US$ 467.16 million.

Worker remittances increased by 13.4 percent during the nine month period to US4 2,814.5 million from US$ 2,481.4 million a year ago.

"Official reserves continued to remain significantly above targeted levels and stood at US$ 6.7 billion by the end of October, sufficient to finance 6.3 months of imports," the Central Bank said.

Related Info:
Central Bank of Sri Lanka - Recent Economic Developments - Highlights of 2010 and Prospects for 2011