Jan 17, 2020 (LBO) – Sri Lanka’s trade deficit contracted marginally in November 2019 (year-on-year), with both imports and exports declining, the latest Central Bank data showed.
The deficit in the trade account declined in November to US dollars 762 million, from US dollars 785 million in November 2018.
The trade deficit contracted by US dollars 2,4 28 million to US dollars 7,214 million during the first eleven months of 2019 from US dollars 9,642 million in the corresponding period of 2018.
In comparison to November 2018, earnings from merchandise exports declined marginally by 0. 1 percent to US dollars 97 9 million in November 2019, with all major sub-sectors broadly recording a similar trend.
Contraction of merchandise imports continued for the 13th consecutive month with a moderate decline of 1.3 percent (year on year) in November 2019 to US dollars 1, 7 41 million, driven by lower intermediate goods imports.
Other Major Inflows to the Current Account
Tourist arrivals amounted to 176,984 in November 2019, with a decline of arrivals of 9.5 percent in November 2019, compared to the drop of 22.5 percent in October and 27.2 percent in September 2019.
Although tourist arrivals decreased on a year-on-year basis in November 2019, a continued recovery is seen in the tourism industry.
Workers’ remittances declined (year-on-year) in November 2019 and have recorded a cumulative decline during the first eleven months of 2019.
Meanwhile, the financial account of the balance of payments was augmented with the proceeds of the seventh tranche of the IMF EFF programme and net foreign inflows to the Government securities market.
Sri Lanka received the seventh tranche of the IMF EFF of US dollars 164 million in November 2019.
Foreign investment in rupee-denominated government securities recorded a net inflow of US dollars 46 million in November 2019.
On a cumulative basis, the government securities market recorded a net outflow of US dollars 234 million during the first eleven months of the year.
However, the CSE recorded a net outflow of US dollars 36 million during the month. On a cumulative basis, financial flows to the CSE recorded a net outflow of US dollars 30 million during the first eleven months of 2019.
The Sri Lankan rupee appreciated against the US dollar during 2019 and thus far during 2020 as well.