October trade deficit eases on robust exports growth in apparel and agriculture

• Trade deficit narrows to US$ 544 mn, down from US$ 682.5 mn recorded in Oct.2023

The merchandise trade deficit came in lower in October 2024 on the back of the notably higher export earnings which was supported by both apparels and textiles exports, petroleum products and agricultural exports while the lower oil bill helped to keep imports in check.

Sri Lanka exported goods worth of US$ 1,158 million in October 2024, up by a robust 24.8 percent from a year ago bringing the cumulative ten months exports earnings to US$ 10,676.10 million which was a 7.7 percent increase from the same period last year.

The imports were at US$ 1,702.4 million, up 5.7 percent but the cumulative ten months imports rose by 10.7 percent to US$ 15,420.6 million from the corresponding period of last year.

This made possible a trade deficit of US$ 544.4 million, less than the US$ 682.5 million recorded in the same month in 2023. The cumulative trade deficit was however at US$ 4,744.6 million, higher than the US$ 4,023.9 million in the ten months in 2023.

Higher exports were mainly possible from textiles and garments exports of US$ 431.3 million in October, up 21.8 percent from a year ago.

It seems that apparel is again at a bright spot due to economies in the West holding up strong when they entered the year-end shopping season.

Providing a glimpse into early shopping before Christmas, the Black Friday shoppers in the United States had spent a record US$ 10.8 billion on online purchases, rising 10 percent from a year ago, according to Adobe Analytics.

But the spending in US retail stores has grown by just 0.7 percent year-on-year, in an indication that shoppers have avoided long lines at stores for the convenience of online shopping.

Exports of petroleum products rose by 135.6 percent to US$ 121.4 million, taking the total industrial exports to US$ 900.2 million in October, up 24.5 percent.

Tea exports came in at US$ 126.8 million, up 32.6 percent from a year ago while coconut and spices exports were also up by 40.6 percent and 58.4 percent to US$ 40.1 million and US$ 51.1 million respectively, helping agricultural exports of US$ 253.7 million, up 27.0 percent.

The modest growth in imports was possible due to the 31.9 percent decline in the fuel bill to US$ 337.3 million in October.  

As a result, the total intermediate goods imports slipped 0.6 percent to US$ 1,079.2 million.

The consumer goods imports were up 10.8 percent to US$ 291.9 million on both food and beverage imports and non-food consumer goods imports.

Food imports were higher by 6.5 percent to US$ 150.4 million while the non-food imports were up by a faster 15.8 percent to US$ 141.6 million as people are ramping up spending on discretionary items and durables such as home appliances which were up by 73.2 percent in import spending in October.

Meanwhile, investment goods were up by 27.5 percent to US$ 330.4 million mainly due to machinery and equipment, followed by transport equipment.