ECONOMYNEXT – Sri Lanka’s export earnings fell 3.4 percent to $809.7 million in November 2016 from a year ago, dragged down by lower shipments of textiles and tea, reversing the year-on-year increasing trend in the previous three months, the Central Bank said.
Sri Lanka’s November imports rose 18.2 percent to $1.73 billion, with sharp increases seen in imports of coal, medicines and textiles.
“The trade deficit widened as a result of higher import expenditure amid a decline in export earnings, albeit marginally, during November 2016,” the statement said.
“The significant increase in import expenditure in November 2016 was mainly due to higher expenditure on intermediate and investment goods.”
“Earnings from tourism continued to record healthy growth, while workers’ remittances declined marginally during the month,” the Central Bank said.
“Agricultural exports – led by minor agricultural products, spices and tea – and industrial exports – led by textiles and garments; gems, diamonds and jewellery – mainly contributed to this contraction.”
Earnings from industrial exports, which account for about 77 percent of total exports, declined by 2.0 percent year-on-year to $624 million in November 2016.
“Export earnings from textile and garments, which account for around 47 percent of total export earnings, declined by 6.6 percent year-on-year to $383 million in November 2016, reflecting lower garment exports to both traditional and non-traditional markets,” the statement said.
Spending on imports increased 18.2 percent year-on-year to $1,732 million in November 2016, due to increased expenditure on certain intermediate goods and investment goods, while consumer goods imports fell marginally mainly because of lower car imports.
Expenditure on imports of intermediate goods increased 27.8 percent year-on-year to $883 million in November 2016.
“This increase was largely driven by higher expenditure on textiles and textile articles, coal, gold, base metals and cement clinkers,” the Central Bank said.
“Import expenditure on textiles and textile articles increased 54.1 percent, mainly due to an increase in fabric imports. Import expenditure on crude oil increased 5.8 percent.
“Due to the increase in both volumes and unit prices, import expenditure on coal increased 166.3 percent,” the statement said.
Sri Lanka’s January-November 2016 trade deficit widened 7.5 percent to $8.13 billion from a year ago, the Central Bank said.
(COLOMBO, March 10, 2017)