Dec 28, Colombo: Sri Lanka's imports declined in November to continue the steady declining trend of the trade deficit since April this year, the external sector performance review of the Central Bank released Friday showed.
Responding to policy measures adopted earlier in the year to curb imports, the trade deficit from January- November 2012 has declined by 2.1 percent to US$ 8.58 billion compared to the same period previous year.
The trade deficit contracted 9.8 percent to US$992.9 million in November from US$1.1 billion the same month last year.
Import expenditure during the first eleven months of 2012 declined 4.5 percent amounting to US$ 17.57 billion. For the month of November import expenditure declined by 8.4 percent to US$ 1.82 billion.
The main contributors to the decline in import expenditure included drop of imports of gold, vehicles and transport equipment.
Demand for Sri Lanka's exports also has declined due to the slow recovery of advanced economies in the world, particularly, Sri Lanka's two biggest markets, the US and the Europe.
Industrial exports continued to record a decline on a year-on-year basis since March this year.
However, reflecting seasonal demand, earnings from exports of items such as garments, tea, gems and jewellery as well as leather, travel goods and footwear recorded positive growth for November 2012.
Export earnings declined by 6.6 percent in November 2012 to US$ 827.6 million although earnings from textiles and garments increased by 4.6 percent in the month to US$ 363.9 million and tea exports increased by 0.6 percent earning US$ 126.0 million during November.
Earnings from tourism and workers' remittances increased cushioning the losses in other sectors.
Tourist arrivals during November of 2012 grew by 20.1 percent, compared to the same period last year, to 109,202, and in parallel earnings from tourism grew, by 30.1 percent, to US$ 114.7 million.
For the year, tourist arrivals reached 883,353 reflecting a growth of 16.5 percent while earnings from tourism during increased by 23 percent to US$ 905.3 million.
The Central Bank expects the tourist arrivals to reach about one million for the year.
Workers' remittances this year amounted to US$ 5.432 billion, showing a growth of 17.1 percent, from 2011.
Inflows to the Government from Treasury Bills and Bonds increased 197.4 percent in November to US$ 143.2 million.
Gross official reserves amounted to US$ 6.49 billion by end November 2012, the Bank said.
Higher inflows in terms of tourism earnings and workers' remittances are expected to increase foreign exchange liquidity in the market, and strengthen the external value of the rupee, according to the Central Bank.