Jan 11, Colombo: Sri Lanka's trade deficit contracted by 12 percent to US$ 645 million in September 2016 from US$ 733 million a year earlier due to the combined effect of an increase in exports and a decline in imports, according to the Central Bank data released in its External Sector Performance Review Wednesday.
Earnings from exports grew 5.7 percent in September 2016, year-on-year, to US$ 898 million largely to the growth in all major categories of exports. The highest contribution to the growth was from industrial exports led by transport equipment, food beverages and tobacco and rubber products, followed by agricultural exports, led by tea.
Expenditure on imports declined by 2.5 percent to US$ 1.543 billion in September 2016 compared to the same month in 2015 largely due to the lower expenditure incurred on importation of personal motor vehicles and fuel.
On a cumulative basis, earnings from exports declined by 3.0 percent to US$ 7.763 billion during the first nine months of 2016 while expenditure on imports decreased by 1.7 percent to US$ 13.95 billion resulting in no net change in cumulative trade deficit of US$ 6.18 billion.
Tourist arrivals continued to expand, recording a marginal growth of 3.6 percent in September 2016. Cumulative tourist arrivals during the first nine months of 2016 increased by 14.6 percent earning US$ 2.5 billion compared to US$ 2.18 billion earned in the corresponding period of 2015.
Workers' remittances declined marginally by 1.1 percent to US$ 577.9 million in September 2016 in comparison to US$ 584.2 million in September 2015. However, cumulative inflows from workers' remittances at US$ 5.382 billion during the first nine months of 2016 recorded a growth of 3.9 percent in comparison to US$ 5.182 billion in the corresponding period of 2015.
Foreign investments at the Colombo Stock Exchange recorded a net inflow of US$ 5.1 million in September 2016. However, the cumulative foreign investments in the CSE during the first nine months of 2016 recorded a net outflow of US$ 19.02 million.
During the first nine months of 2016, the overall BOP is estimated to have recorded a surplus of US$ 243.1 million, in comparison to a deficit of US$ 2.316 billion recorded during the corresponding period of 2015.
Sri Lanka’s gross official reserves as at end September 2016 amounted to US$ 6.5 billion, equivalent to 4.1 months of imports, while total foreign assets stood at US$ 9.1 billion, equivalent to 5.8 months of imports.
The rupee recorded a depreciation of 0.1 percent against the US dollar during the period from end 2016 to 10th January 2017.