A 38 percent higher fuel bill is burning a hole in the island’s balance of trade

A 38 percent higher fuel bill is burning a hole in the island’s pocket, driving up its trade deficit to US$ 1.46 billion by August, up US$ 586 million from a year ago. The Central Bank on Tuesday said Sri Lanka’s import bill grew 20 percent to US$ 5.05 billion up from US$ 4.22 billion the year before, with global oil prices racing to new records.

Export earnings only grew eight percent up to August, bringing in US$ 3.59 billion, up from US$ 3.34 billion.

The Central Bank said the larger fuel bill and increased spending on textiles, paper and chemical products pushed up intermediate goods imports 19 percent, accounting for 58 percent of all imports.

Textile imports stretched 10 percent to US$ 966 million from US$ 877 million the year before, making up 33 percent of intermediate goods imported until August.

The continued rise in textile imports translated to higher garment exports up to end August with earnings increasing 4 percent to US$ 1.73 million.

Fertilizer imports drained marginally as paddy farmers prepared to Harvest their Yala season crop, reducing import costs 7 per cent to US$ 52 million.

However, exports from the agro indust