October trade gap narrows 6.7% YOY

7 December 2012 03:17 am Views - 3223

Sri Lanka’s trade deficit in October narrowed 6.7 percent Yearon-Year to US $ 810 million, amidst falling import expenditure and improved foreign inflows, the external performance report released by the Central Bank for the month of October showed.

Meanwhile, the trade deficit for the first 10 months of 2012 also narrowed from 1 percent YoY to US $ 7590 millions, making October the second consecutive month to see such a decline in the trade account of the balance of payments (BoP). On September, the trade gap narrowed by 3 percent YoY for the first time since December 2009.

The export earnings during the month of October contracted 13.4 percent YoY to US $ 770.4 million with earnings from all export major categories falling.

The earnings from agricultural products fell 14.5 percent YoY to US $ 187.5 million. The earnings from tea exports fell 9.6 percent to US $ 116 million.

The export earnings from textile and garments fell 16.6 percent YoY to US $ 297.2 million and earnings from rubber products also fell 24.1 percent YoY to US $ 62.9 million.

“Slowing down of economic activity globally, and particularly in advanced economies which constitute key markets for Sri Lanka’s exports, has resulted in contracting demand for exports,” the Central Bank said.

The earnings from exports declined by 6.6 percent YoY in the first ten months of 2012 to US dollars 8,164 million. Expenditure on imports during October also fell 10.1 percent YoY to US $ 1580.5 million with expenditure on almost all imports categories falling, except for three major categories.

The import expenditure on consumer goods fell 26.7 percent YoY to US $ 227.8 million while expenditure on import of petroleum fell 4.9 percent YoY to US $ 375.6 million.

Crude made a relatively high contribution to the decline in import expenditure as crude oil was not imported during the month of October due to the closure of Sapugaskanda refinery, but this decline was offset to a large extent by increased imports of refined petroleum products, the Central Bank said.

With regard to intermediate goods, significant contributions to the decline were noted in imports of gold (48 per cent) and fertilizer (11 per cent), the Central Bank

The import expenditure on textile and textile articles rose 12.7 percent YoY to US $ 224 million. The expenditure on import of investment goods fell 1.3 percent YoY to US $ 376.4 million. Although import expenditure on machinery and equipment and building materials rose 23.1 percent and 4.8 percent YoY respectively, the expenditure on transport equipment fell 44.9 percent YoY to 59.8 million.