Sri Lanka’s trade gap widens 22%

Jan. 19 (LBO) – Sri Lanka’s trade deficit has widened by 22 percent to US$ 2.4 billion for the eleven months in 2005, though foreign remittances helped strengthen the island’s balance of payments, the Central Bank said Thursday Jan. 19 (LBO) – Sri Lanka’s trade deficit has widened by 22 percent to US$ 2.4 billion for the eleven months in 2005, though foreign remittances helped strengthen the island’s balance of payments, the Central Bank said Thursday

A 24 percent growth in private remittances helped the country’s balance of payments swell to US$ 474 million by December 2005, the bank said.

Sri Lanka, which was hit by the Dec. 2004 tsunami, has benefited by foreign aid flows and lenders delaying debt repayments, in its rebuilding exercise.

The government estimates around US$ 3.2 billion is required over a three to five year period, though international donors have pledged US$ 2.2 billion.

So far, only US$ 1.8 billion pledged has come in, as much of the relief work is still hampered by shortages of land, labour and material.

“…the benefit of debt moratorium and the Central Bank’s purchase of the net proceeds of foreign currency loans mobilised by the government,” also contributed to the surplus, the sta