June 20, Colombo: Sri Lanka's external sector strengthened further in April 2014, and trade deficit narrowed by 17.7 percent to US$ 682 million as earnings from exports substantially increased while expenditure on imports declined during the month, the Central Bank said Friday releasing the External Sector Performance review.
Earnings from exports in April 2014 increased significantly on a year-on-year (YoY) basis by 9.4 percent to US$ 765 million, while expenditure on imports declined by 5.3 percent to US$ 1.444 billion.
The cumulative trade deficit for the first four months of 2014 contracted by 12.1 percent, as the growth in export earnings of 16.9 percent outpaced the 2.6 percent increase in import expenditure.
Improved performance in agricultural exports, followed by industrial exports, led the significant growth in exports.
Earnings from agricultural exports increased 13.7 percent for April to US$ 199.7 million, out of which tea exports increased by 9.8 percent amounting to US$ 116.8 million.
Earnings from industrial exports, which account for more than three fourths of total export earnings increased by 8.0 percent, year-on-year, to US$ 559.5 million in April 2014, reflecting an increase in earnings from export of textiles and garments by 22.5 percent to US$ 336.8 million.
Expenses on fuel imports decreased significantly by 8.8 percent YOY to US$ 316.3 million and expenses on Food and Beverages declined 14.2 percent to US$ 108.8 million in April compared to same month in 2013.
During the month Workers' Remittances grew by 7.5 percent to US$ 554.0 million and earnings from tourism increased 49.8 percent to US$ 162.7 million.
By the end of April 2014, Sri Lanka's gross official reserves amounted to US$ 8.9 billion, while total international reserves, which include foreign assets of commercial banks, amounted to US$ 10.2 billion.
The domestic foreign exchange market has remained relatively stable during the year so far up to 19 June 2014, with the rupee marginally appreciating by 0.40 percent against the US dollar, the Central Bank said.