May trade deficit contracts 12.1% YoY

• Trade deficit records US $ 393mn in May
• Cumulative deficit for first 5 months stands at US $ 2.17bn, up 12.6% YoY

Sri Lanka’s trade deficit narrowed in May as the merchandise exports remained resilient from a year ago levels while the imports edged down, perhaps in an idiosyncratic development in a growing economy.
Sri Lanka exported goods worth of US $ 1,011 million in May and imported goods worth of US $ 1, 405 million resulting in a trade deficit of US $ 393 million.

The three were 0.8 percent, 4.2 percent and 12.1 percent off from the same month in 2023.
However the exports were up solidly by 15.1 percent from April levels while the imports were still down by 2.1 percent during the same period with the trade deficit off by nearly 30 percent from a month earlier.
The cumulative deficit was however up slightly to US $ 2,170 million in the five months, from US $ 1,926 million in the same period in 2023.

The May exports were buttressed mainly by the industrial exports of which petroleum products led the pack while the garments and textiles exports rose from April levels supporting the earnings.For instance, petroleum products grew by 131.6 percent to US $ 90.6 million while garments and textiles slipped 5.5 percent to US $ 390.9 million from a year ago levels.

But garments and textiles were up from US $ 321.7 million April.
The agricultural exports didn’t do well as almost all crops including tea and spices with the exception of coconut fell slightly.

Meanwhile the imports’ decline was caused by consumer and intermediate goods.
The food and beverage imports were low led by lower sugar and dairy imports in May but there was some increase in non-food consumer goods imports. Meanwhile the intermediate goods imports were low due to lower fuel imports, both from a year earlier levels as well as month earlier levels.

However there was some increase in expenditure on wheat, textiles and textile articles and plastic and thereof.
Meanwhile the expenditure on investment goods recorded broad based increase, driven primarily by the imports of machinery and equipment.