Trade deficit widens in June

Sri Lanka’s June trade deficit expanded 25 percent Year-onYear (YoY) to US $ 829.1 million amid a sharp increase in import expenditure, though trade gap for the first six months narrowed 7.1 percent YoY to US $ 4.55 billion.

The export earnings during the month improved 6.8 percent YoY to US $ 807.4 million with all three export categories reporting positive growths, helped by the depreciation of the Lankan rupee against the US dollar.

The export income from agricultural products rose 8.1 percent YoY to US $ 192.6 million with tea export revenue improving 14.5 percent YoY to US $ 116 million.

Revenue from industrial products rose 6.3 percent YoY to US $ 610.8 million with revenues from textile and garment and rubber products exports rising 14.9 and 7.7 percent to US $ 357 million and US $ 6.9 million, respectively.

“Garment exports to the USA increased by 24.8 percent, yearon-year, while garment exports to the EU increased by 6.7 percent YoY in June 2013.”

“Earnings from exports of machinery and mechanical appliances increased by 25.5 percent, led by increased exports of electrical machinery and equipment and home appliances,” the Central Bank said.

However, the cumulative export earnings for the first six months declined 4.5 percent YoY to US $ 4.66 billion.

Import expenditure during June rose as much as 15.3 percent YoY to US $ 1.63 billion, led by higher expenditure on crude oil imports. The June oil bill rose 45.5 percent YoY to US $ 582.2 million.

“The average import price of crude oil rose by 9 percent YoY to US $ 10.25 per barrel in June 2013, while the import volume of petroleum in June was also significantly higher on YoY basis due to increased imports of crude oil,” the Central Bank said.

On a cumulative basis however, the oil bill declined 12.8 percent YoY to US $ 2.34 billion.

Import expenditure on consumer goods rose 18.7 percent YoY to US $ 274 million of which expenditure on food and beverages and other consumer goods increased 11.8 percent and 24.7 percent YoY to US $ 120.8 million and US $ 153.3 million, respectively.

“Among other imported items that contributed significantly to the increased import expenditure in June 2013 were vehicles, classified under consumer goods.

“Increased imports of vehicles could be attributed mainly to the recent appreciation of the rupee against several currencies including the Japanese yen, due to currency movements,” the Central Bank said.

The expenditure on investment goods declined 1 percent YoY to US $ 269.6 million. The expenditure on machinery and equipment and building material imports rose 8.5 percent and 2 percent YoY to US $ 138.6 million and US $ 92.9 million, respectively. Transport equipment imports fell 29.1 percent YoY to US $ 37.7 million.

The cumulative expenditure on import expenditure however declined 5.8 percent YoY to US $ 9.21 billion.