Trade gap widens in March as imports flirt US $ 2bn mark

• March exports of US $ 1.1bn, highest on record for a month
• Textiles lead export basket but EU market down
• Petroleum bill heavily weighs on import bill
• Vehicle imports more than double to US $ 150mn 
• Gold imports hit record high 

Sri Lanka’s merchandize trade with other countries continues to give trouble to the policy makers as the deficit in the trade account expanded in March, albeit at a lesser pace due to record high exports during the month. 

According to trade data released by the Central Bank yesterday, during March, Sri Lanka exported goods worth of US $ 1.1 billion, up 6.3 percent year-on-year (YoY) and imports were flirting the US $ 2.0 billion mark, growing at 5.8 percent YoY, expanding the trade deficit to US $ 871 million for the month from US $ 828 million a year ago.

The cumulative trade deficit for the first three months of the year stood at US $ 2.9 billion compared to US $ 2.5 billion recorded for the corresponding three months of 2017.

Meanwhile, exports during March were largely driven by industrial exports led by textiles and garments, the Central Bank said. 

Textiles and garments exports rose by 7.4 percent YoY to US $ 487 million, the highest value for a month since November 2013. 

The United States largely drove March textile exports, but the exports to the European Union (EU) fell marginally, although Sri Lanka enjoys the GSP Plus benefit with the EU.

Among other exports, gem, diamond and jewellery rose significantly by 91.9 percent YoY to US $ 38.7 million due to higher gem exports.

“Meanwhile, all sub-categories under agricultural exports, except for tea and unmanufactured tobacco, declined in March 2018”, the Central Bank said.

The agricultural exports declined by 5.6 percent YoY to Rs.242.8 million in March, but the earnings from tea exports rose by 3.6 percent YoY to US $ 138.5 million due to dual effect of higher prices and volumes.