Sri Lanka’s October trade gap widens, tea, garment exports down
Dec 22, 2018 06:48 AM GMT+0530 | 0 Comment(s)
ECONOMYNEXT- Sri Lanka's trade deficit widened significantly in October 2018 to 903 billion US dollars from 752 million dollars a year ago owing to higher growth in imports alongside a marginal growth in exports, the central bank said.
“However, it is expected that the trend of increasing imports will reduce in the coming months with the lagged impact of recently introduced restrictions on certain import categories,” a statement said.
Earnings from merchandise exports increased by 0.4 per cent year-on-year to 979 million US dollars in October 2018.
“The marginal growth of exports in October reflects mainly the decline in agricultural exports by 11.5 per cent which offset the 4.5 per cent growth of industrial exports.”
Export earnings from textiles and garments increased marginally in October 2018 due to higher earnings from textile exports despite the slight decline registered in garment exports.
“The reduced earnings from garment exports was mainly driven by the lower demand from the USA, despite an increase in exports to the EU market and non-traditional markets such as India, Canada, Japan and Hong Kong,” the central bank said.
Earnings from agricultural exports were lower during the month owing to the poor performance in almost all sub categories except seafood, vegetables and rubber.
Export earnings from tea declined in October 2018 owing to lower average export prices and exported volumes.
Spending on merchandise imports increased by 9.0 per cent year-on-year to 1,882million US dollars in October 2018.
Expenditure on intermediate goods increased due to higher imports of textiles and textile articles, fuel and wheat and maize imports.
Import expenditure on consumer goods increased during the month owing to higher imports of personal motor cars less than 1,500 cylinder capacity (cc), hybrid and electric motor vehicles.
“However, it is expected that the importation of motor vehicles would decelerate in the coming months reflecting the lagged impact on such imports of the policy measures introduced in September 2018,” the statement said.