Jan 28, 2016 (LBO) Sri Lanka’s trade deficit for the first eleven months of 2015 marginally increased by one percent to 7.6 billion dollars, the central bank said.
Worker remittances declined 7.2 percent to 574.5 million dollars in November 2015, year-on-year, although cumulative inflow from remittances was up marginal 0.8 per cent to 6.4 billion during the first eleven months of 2015.
“The comparatively low growth in workers’ remittances during this period could be attributed to the drop in income in oil exporting Middle Eastern countries with decline in world oil prices,” a statement said.
BOP is estimated to have recorded a deficit of 1.3 billion dollars during the year to November, compared with a surplus of 1.6 billion during the corresponding period of 2014.
In terms of trade, earnings from exports declined by 9.3 percent to 835 million dollars in November 2015, the central bank said.
“This was mainly due to the declines recorded in tea, rubber products, petroleum products and garments exports. The currency depreciation and geo-political development, particularly in the Middle East countries caused continued decline in demand for tea,” the central bank said.
Accordingly export earnings from tea declined significantly by 21.1 per cent, year-on-year, in November 2015.
The average export price of tea remained unchanged from the previous month at US dollar 4.11 per kilogram though down from US dollars 4.75 per kilogram recorded in November 2014.
Earnings from rubber product exports continued to weaken and recorded a 19.5 per cent decline, year-on-year, in November. Petroleum product exports recorded a 40.5 per cent decline as a result of the lower prices for bunkering and aviation fuel, despite bunkering quantity increased by 32.9 per cent, year-on-year, in November 2015.
Export earnings from garments, which contribute nearly 46 per cent to the total exports, declined by 2.7 per cent in November 2015, reflecting low exports to EU markets.
However, earnings from spice exports continuously recorded a growth so far this year. Adding to that, sub categories of gems and edible nuts showed growth in the month of November 2015.
On a cumulative basis, earnings from exports declined by 4.4 per cent to US dollars 9,679 million during the first eleven months of 2015, reflecting the significant decline in earnings from tea, rubber products and sea food exports.
In line with the substantial decline in international oil prices, expenditure on imports in November 2015 continued to decline by 11.0 per cent, year on year, to US dollars 1,465 million, the lowest monthly import expenditure in 2015.
“Despite the increase in import expenditures on consumer goods and investment goods, a substantial reduction in import expenditure on intermediate goods led to this decline.”
The drop in international oil prices in November 2015 resulted in a 27.9 per cent decline in the fuel import bill despite the increases in import volumes of both crude oil and refined petroleum.
The average import price of crude oil declined to US dollars 45.46 per barrel in November 2015 compared to US dollars 76.82 per barrel recorded in November 2014.
In addition, import expenditure on textiles and textile articles, fertiliser and diamonds and precious stones and metals also declined by 22.3 per cent, 61.6 per cent and 80.7 per cent, respectively, on a year-on-year basis, contributing more than 55 per cent of the overall decline in import expenditure in November 2015.
Import expenditure on rice declined significantly in November 2015 for the seventh consecutive month mainly due to the availability of rice in the local market and higher imports recorded in the previous year.
Import expenditure on transport equipment declined by 41.4 per cent, year-on-year, mainly due to the higher imports in November 2014 largely reflecting the impact of the import of a cruise ship and three light vessels.
Even though, expenditure on vehicle imports recorded a lower value in November 2015, compared to the previous month, it increased by 25.0 per cent on a year-on-year basis mainly due to the increase of importation of motor cars. Further, imports of building materials and machinery and equipment, increased during the month.
On a cumulative basis, expenditure on imports declined by 2.1 per cent to US dollars 17,244 million during the first eleven months of 2015.
The cumulative earnings from tourism increased to 2.8 billion dollars during 2015 compared with 2.4 billion dollars in 2014.