Sept 24, Colombo: Sri Lanka's trade deficit increased 40.1 percent to US$ 743.3 million in July from US$ 530.6 million a year earlier due to significant increase in import expenditure, the Central Bank said Tuesday in its external sector performance review for the month of July.
However, the cumulative trade balance continued to decline for the eighth consecutive month with increased foreign inflows and the external sector continued to remain stable in the first seven months of 2013, the Central Bank reported.
For the year, the trade deficit declined by 2.5 percent from US$ 5.43 billion to US$ 5.3 billion.
Export earnings increased significantly by 8.0 percent in July to US$ 857.8 million from US$ 794.4 million a year earlier. For the year earnings declined 2.7 percent from US$ 5.674 billion to US$ 5.519 billion.
For the month of July, exports of Agricultural Products grew 21.6 percent and Industrial Products grew 3.7 percent. Tea exports rose 20.2 percent while Textiles and garments exports increased by 13.5 percent.
Expenditure on imports increased 20.8 percent for the month from US$ 1.325 billion a year ago to US$ 1.60 billion in July 2013. Cumulatively, expenditure on imports declined by 2.6 percent to US$ 10.82 billion in the first seven months of this year from US$ 11.11billion in the same period of 2012.
In July 2013, workers' remittances increased by 17.0 percent, year-on-year, to US$ 555.9 million and cumulatively in the first seven months of 2013 workers' remittances amounted to US$ 3.764 million, a rise of 10.1 percent compared to same period in 2012.
Earnings from tourism increased 8.3 percent in July to US$ 108.8 million while for the first seven months of 2013 earnings increased by 20.3 percent to US$ 674.1 million.
Increased foreign investment inflows during the first half of 2013 strengthened the financial account of the Balance of Payment (BOP), the Bank said.
Foreign Direct Investment (FDI) inflows during the first half of 2013 increased 20 percent and amounted to US$ 540 million.
Sri Lanka's gross official reserves stood at US$ 6.3 billion by end July 2013 while the total international reserves, which include foreign assets of commercial banks, amounted to US$ 7.3 billion, the Central Bank recorded.