Aug 21, Colombo: Sri Lanka's external sector strengthened further and trade deficit narrowed for the ninth consecutive month in June 2014 by 35.3 percent to US$ 454 million as earnings from exports substantially increased while expenditure on imports declined during the month, the Central Bank said releasing the External Sector Performance review Thursday.
Earnings from exports in June 2014 increased significantly on a year-on-year (YoY) basis by 22.0 percent to US$ 986 million, while expenditure on imports declined by 4.6 percent to US$ 1.439 billion.
The cumulative trade deficit for the first six months of 2014 contracted by 20.1 percent to US$ 3.546 billion, as a result of a 16.8 percent growth in export earnings and a 1.2 percent decline in import expenditure, the Central Bank said.
The largest contribution to the overall growth came from industrial exports followed by agricultural exports.
In June, earnings from industrial exports grew by 18.7 percent to US$ 725.3 million reflecting positive performance in almost all sub categories.
Textiles and garment exports grew by 25.0 percent to US$ 446.2 million in June 2014 compared to same period last year.
Earnings from agricultural exports increased 22.0 percent in June to US$ 985.6 million, out of which tea exports increased by 31.5 percent amounting to US$ 152.6 million.
In June 2014 expenses on fuel imports decreased by 9.4 percent to US$ 412.4 million. However, expenses on Food and Beverages increased significantly 12.3 percent to US$ 135.6 million in June compared to the same month in 2013.
During the month Workers' Remittances grew by 10.8 percent to US$ 585.1 million and earnings from tourism increased 22.7 percent to US$ 149.1 million.
Earnings from tourism for the first six months of the year surpassed the US$ 1 billion mark. Tourism sector earned US$ 1.051 billion increasing 33.8 percent from the same period in last year.
By the end of June 2014, Sri Lanka's gross official reserves amounted to US$ 9.2 billion, while total international reserves, which include foreign assets of commercial banks, amounted to US$ 10.7 billion.
The domestic foreign exchange market has remained relatively stable during the year so far up to 18 August 2014, with the rupee marginally appreciating by 0.45 percent against the US dollar, the Central Bank said.