Jan 29, 2019 (LBO) – Sri Lanka’s deficit in the trade account narrowed significantly in November 2018 (year-on-year) following a decline in import expenditure, the Central Bank said.
Exports grew by 4.1 per cent while imports contracted by 9.1 per cent in November 2018 (year-on-year).
“The deficit in the trade account narrowed significantly in November 2018 in comparison to November 2017 due to a sharp decline in import expenditure and a modest increase in export earnings,” it said.
However, on a cumulative basis, the deficit in the trade account expanded during the first eleven months of 2018 in comparison to the corresponding period of 2017.
Earnings from merchandise exports increased moderately by 4.1 per cent (year-on-year) to US dollars 980 million in November 2018.
The growth in exports was driven by industrial exports while agricultural exports continued to decline.
Under industrial exports, export earnings from textiles and garments increased notably in November 2018 mainly driven by exports to the USA.
In addition, garment exports to non-traditional markets such as India, Canada and Australia as well as the EU market increased along with textile and other made up textile articles.
Earnings from petroleum products increased significantly in November 2018 reflecting higher bunker and aviation fuel prices despite a slight reduction in export volumes in comparison to that of November 2017.
Export earnings from machinery and mechanical appliances also increased substantially during November 2018 due to improved performance in all sub categories therein.
Expenditure on merchandise imports declined by 9.1 per cent (year-on-year) for the first time since June 2017 to US dollars 1,765 million in November 2018.
The decline in consumer and investment goods contributed to the decline reflecting mainly the impact of restrictions on personal vehicles and non-essential consumer goods imports, while the relatively larger depreciation of the Sri Lankan rupee may also have contributed to curtailing imports.