Oct 25, Colombo: Sri Lanka's expenditure on imports has recorded an increase from July to August while the decelerating trend in the trade balance continued into August 2012, the Central Bank said Thursday in its External Sector Performance review for the month of August.

The trade balance recorded a year-on-year increase of 6.3 per cent for the first eight months of 2012 as export earnings declined by 5.7 percent to US$ 6.59 billion and expenditure of imports declining marginally by 0.2 percent to US$ 12.86 billion.

On a month-on-month basis, expenditure on imports in August increased 32 percent from previous month to US$ 1.75 billion.

The Central Bank attributed the increase largely to the increase in fuel imports due to the temporary closure of the refinery for repairs in July and to the imports of investment goods. Expenses on investment goods inclusing machinery and equipment and building materials increased 9.9 percent to US$ 444.7 million in August.

In August, income from exports declined by 13 percent to US$ 828.9 million due to the decline in exports of both industrial goods and agricultural goods.

Export earnings from Tea declined 32.7 percent from the previous month to US$ 95.7 million and garment exports dropped 3.9 percent to US$ 358.8 million. Export earnings from rubber increased 2.4 percent to US$ 84.5 million in August 2012.

In the first eight months of 2012, workers' remittances increased 15.6 percent to US$ 3.91 billion and foreign investments grew by 14.6 percent to US$ 452 million.

Earnings from Tourism recorded an increase of 23.1 percent to US$ 642.2 million from January to August this year.

Inflows to the government from Treasury Bills and loans increased 35.7 percent to US$ 4.26 billion.

By end of August 2012, gross official reserves amounted to US$ 7.05 billion, the Central Bank reported in its review.

Sri Lanka earlier this year took drastic measures to contain the growing trade balance which stood at US$ 9.7 billion in 2011 by limiting the high growth of both credit and imports.