Sri Lanka’s trade deficit in August contracted 24.2 percent amid earnings from exports rising 10.7 percent year-on-year (YoY) to US $ 917.8 million. The import expenditure during the month fell 7.7 percent to US $ 1.61 billion.

According to the Central Bank, the August export income was the highest monthly value since January 2012, which was led by earnings from agricultural exports.

During August, agricultural exports rose 41 percent YoY to US $ 247.1 million of which tea exports accounted for US $ 142.8 million, up 49.3 percent YoY. According to the Central Bank, an increase in tea exports to Turkey and Iraq mainly contributed to this increase.

However, rubber export earnings during August fell 8 percent YoY to US $ 77.7 million. Apparel exports edged up 2.1 percent YoY to US $ 366.5 million.

“During the month, earnings from export of garments to the USA increased by 9.4 percent, while exports to the EU declined marginally by 0.7 percent,” the Central Bank said.

Meanwhile, import expenditure on main intermediate and investment goods categories fell sharply, easing the country’s cumulative import expenditure during August.

Import expenditure on intermediate goods fell 5.7 percent YoY to just above US $ 1 billion. The August fuel bill however rose 7 percent YoY to US $ 444.7 million.

Expenditure on imported investment goods fell 25.7 percent YoY to US $ 330.5 million, as machinery and equipment imports fell 33 percent to US $ 172.5 million, with transport equipment imports by 46 percent to US $ 45.8 million. The import expenditure on building material however rose 10.4 percent YoY to US $ 11.9 million.

On a cumulative basis, earnings from exports during the first eight months of 2013 declined by 1 percent to US $ 6.43 billion, while expenditure on imports declined by 3.3 percent to 12.43 billion, compared to the corresponding period in 2012.

Accordingly, the cumulative trade deficit during the first eight months of 2013 declined 5.6 percent to US $ 5.99 billion, from US $ 6.35 billion in the corresponding period of 2012.