Aug 09, Colombo: Sri Lanka's trade deficit widened 15.7 percent to US$ 813.5 million in May 2016 from US$ 702.9 million a year earlier, according to the Central Bank data released in its External Sector Performance Review on Tuesday.
On a cumulative basis, in the first five months of 2016, the trade deficit increased by 1.4 percent to US$ 3.434 billion from US$ 3.388 billion recorded during the same period of 2015.
The Bank said the trade deficit during the month widened due to decline in export earnings amidst a marginal growth in import expenditure. Decline in export earnings was mainly due to the subdued performance in exports of tea, rubber products and textiles and garments.
Earnings from exports declined by 12.0 per cent, year-on-year, to US$ 776 million in May 2016 from US$ 883 billion recorded in May 2015, reflecting contractions in all major categories of exports.
On a cumulative basis, exports earnings during the first five months of 2016 declined by 6.0 percent, year-on-year, to US$ 4.211 billion.
Reversing the year-on-year declining trend that prevailed during the last ten months, expenditure on imports grew marginally by 0.3 percent, to US dollars 1.590 billion in May 2016 compared to US dollars 1.585 billion in May 2015.
On a cumulative basis, expenditure on imports during the first five months of 2016 decreased by 2.8 percent to US$ 7.645 billion, mainly driven by the decline recorded in fuel transport equipment and rice imports.
Cumulative earnings from tourism increased to US$ 1.598 billion during the first six months of 2016 compared to US$ 1.376 billion recorded during the same period in 2015.
Workers' remittances increased by 11.1 percent, year-on-year, to US$ 597.2 million in May 2016 from US$ 537.7 million recorded in May 2015. The cumulative inflow from workers' remittances increased by 5.9 percent to US$ 2.968 billion during the first five months of 2016 in comparison to the corresponding period of 2015.
During the first five months of the year, foreign investments in the Colombo Stock Exchange (CSE) recorded a net outflow of US$ 37.3 million and the government securities market recorded a net outflow of US$ 442.8 million.
During the first five months of 2016, the overall BOP is estimated to have recorded a deficit of US$ 1.142 billion in comparison to a deficit of US$ 1.307 billion recorded during the corresponding period of 2015.
Sri Lanka's gross official reserves as at end May 2016 amounted to US$ 5.6 billion, equivalent to 3.6 months of imports while total foreign assets amounted to US$ 7.7 billion, equivalent to 4.9 months of imports.
The rupee recorded a modest depreciation of 1.1 per cent against the US dollar during the period from end 2015 to 08th August 2016.