Dec 03, Colombo: Sri Lanka's trade deficit in October 2013 declined sharply as a result of strong growth in exports, the Central Bank said Tuesday in its External Sector Performance review for the month.
As global economy recovered Sri Lanka's earnings from exports in October 2013 increased to record levels surpassing US$ 1 billion for the first time in history, the Central Bank reported. At the same time expenditure on imports declined resulting in a contraction of the trade deficit.
Led by industrial exports followed by agricultural exports, earnings from exports in October 2013 increased 35.1 percent year-on-year reaching US$ 1.041 billion while expenditure on imports declined by 2.8 percent to US$ 1.535 billion, due to the significant decline in both intermediate and investment goods imports.
Accordingly, the trade deficit contracted significantly by 38.9 percent to US$ 494 million in October.
On a cumulative basis, earnings from exports during the first ten months of 2013 grew by 3.6 percent, while expenditure on imports contracted by 1.1 percent from the corresponding period in 2012.
Accordingly, the cumulative trade deficit contracted by 6 percent to US$ 7.216 billion, during the period compared to the corresponding period of 2012.
Tourist arrivals to the island during the first ten months of the year rose 16.8 percent with 904,015 visitors. Earnings from tourism in this period grew year-on-year by 26 percent to US$ 996.2 million, compared to the cumulative earning of US$ 790.5 million during the corresponding period of 2012.
Workers' remittances increased by 14.8 percent, year-on-year, to US$ 599.6 million in October 2013 while on cumulative terms during the first ten months of the year remittances increased by 11.8 percent to US$ 5.521.9 billion from the corresponding period of 2012.
During the period from January to October 2013 the overall BOP is estimated to have recorded a surplus of US$ 749 million compared to a deficit of US$ 185 million recorded during the corresponding period of 2012.
Sri Lanka's gross official reserves amounted to US$ 7.1 billion by end October 2013, while total international reserves, which include foreign assets of commercial banks, amounted to US$ 8.5 billion.