Remittances rescue Sri Lanka’s balance of payments

COLOMBO, May 16, 2007 (AFP) – Sri Lanka recorded a trade deficit of 659.5 million dollars in the first quarter, but foreign remittances pushed the overall balance of payments into positive territory, the central bank said Wednesday. Sri Lanka’s exports in the first three months of 2007 earned 1.71 billion dollars while imports cost 2.37 billion dollars, leaving a deficit of 659.5 million dollars, the Central Bank of Sri Lanka said.

The bank said the trade deficit for the same period in 2006 was 783.8 million dollars.
It added that the overall balance of payments for the first quarter of this year was a surplus of 240 million dollars, thanks to private remittances.

The money sent home by Sri Lankans employed abroad rose by 12.4 percent to 648 million dollars in the first quarter, containing the current account deficit. Over a million Sri Lankans are employed abroad.

The export growth in the first quarter of this year was led by textiles and garments, the bank said, adding imports were slower because of a sharp decline in oil imports.

Sri Lanka’s gross official reserves stood at 2.76 billion dollars, equivalent to 3.2 months of imports.

Sri Lanka’s 26-billion-dollar economy grew by 7.4 percent in 2006,