Oct 18, Colombo: Despite an increase in exports earnings Sri Lanka's trade deficit widened 9.4 percent to US$ 856.3 million in August 2017 from US$ 782.8 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 eight months of 2017, the trade deficit widened by 12.2 percent to US$ 6.186 billion from US$ 5.515 billion recorded during the same period of 2016.
Earnings from exports increased for the sixth consecutive month in August 2017 surpassing the US dollars 1 billion mark for the third time during the year indicating the positive impact of the restoration of the GSP+ facility.
Accordingly, exports earnings increased by 15.5 percent to US$ 1.001 billion in August 2017. The growth in exports was mainly driven by industrial exports followed by agricultural exports.
On a cumulative basis, exports earnings during the first eight months of 2017 grew by 7.6 percent (year-on-year) to US$ 7.413 billion, with higher earnings from tea, seafood exports, spices, and petroleum products.
However, expenditure on imports also increased by 12.6 percent (year-on-year) to US$ 1.857 billion in August 2017, particularly due to fuel imports.
On a cumulative basis, expenditure on imports during the first eight months of 2017 grew by 9.6 percent (year-on-year) to US$ 13.6 billion, largely due to higher imports of fuel, gold and rice.
Earnings from tourism increased by 2.5 percent to US$ 327.6 million in August 2017 as the tourist arrivals rose in the month. On a cumulative basis, earnings from tourism increased by 3.5 percent to US$ 2.414 billion during the first eight months of 2017.
Workers' remittances declined sharply by 10.0 percent to US$ 556.6 million in August 2017 from US$ 618.3 million a year earlier. The cumulative inflow from workers' remittances declined by 6.3 percent to US$ 4.503 billion during the first eight months of 2017, relative to the corresponding period of 2016.
Foreign investments in the Colombo Stock Exchange during the first eight months of the year recorded a net inflow of US$ 328.3 million.
During the first eight months of 2017, the overall BOP is estimated to have recorded a surplus of US$ 2.175 billion in comparison to a surplus of US$ 211.5 million recorded during the corresponding period of 2016.
Sri Lanka's gross official reserves, as at end August 2017, rose to US$ 7.7 billion, equivalent to 4.5 months of imports, while total foreign assets amounted to US$ 9.8 billion, equivalent to 5.7 months of imports.
The rupee recorded a modest depreciation of 2.6 percent against the US dollar from end 2016 up to 16 October 2017.