Sri Lanka trade deficit widens 20.2 percent in MarchStaff writer ▼ | July 4, 2016
Sri Lanka's trade deficit widened 20.2 percent to $620.7 million in March 2016 from $516.2 million a year earlier, according to the Central Bank data released in its External Sector Performance Review.
Asia Earnings from exports declined
The Bank said the trade deficit during the month widened as earnings from exports declined while imports reduced marginally during the month compared to the previous year.
However, during the first quarter of 2016, the trade deficit contracted compared to the corresponding period of 2015 due to the reduction in imports which outweighed the reduction in exports.
Earnings from exports declined by 11.2 per cent, year-on-year, to $945.4 million in March 2016 from $1.065 billion recorded in March 2015, the highest monthly earnings in 2015.
On a cumulative basis, exports earnings during the first three months of 2016 declined by 5.4 percent, year-on-year, to $2.728 billion.
Expenditure on imports declined for the ninth consecutive month in March 2016, marginally by 0.9 percent, year-on-year, to $1.566 billion.
On a cumulative basis, expenditure on imports during the first three months of 2016 decreased by 4.1 percent to $4.594 billion, mainly driven by the decline recorded in fuel imports.
Tourist arrivals continued its growth momentum in April 2016 and the cumulative earnings from tourism increased to $1.195 billion during the first four months of 2016 compared to $996.2 million recorded during the same period in 2015.
Workers' remittances increased by 4.9 percent, year-on-year, to $675.7 million in March 2016 from $644.3 million recorded in March 2015. The cumulative inflow from workers' remittances increased by 6.8 percent to $1.793 billion during the first quarter of 2016 in comparison to the corresponding period of 2015.
Total FDI inflows with foreign loans to BOI companies in the first quarter of 2016 amounted to $164.5 million compared to $346.4 million in the corresponding period of 2015.
During the first quarter of 2016, the overall BOP is estimated to have recorded a deficit of $720.2 million, compared to a deficit of $1.017 billion recorded during the corresponding period of 2015.
Sri Lanka's gross official reserves as at end March 2016 amounted to $6.2 billion, equivalent to 4.0 months of imports while total foreign assets amounted to $8.2 billion, equivalent to 5.3 months of imports. ■