Sri Lanka's  trade deficit narrows significantly 

Sri Lanka continued to perform moderately in merchandise exports as the country recorded gains in exports during the month of November last year while the deficit in the trade account narrowed significantly (year-on-year) following the noteworthy decline in the import expenditure, Central Bank announced.

The latest data released by the country’s monetary regulator showed earnings from merchandise exports increased moderately by 4.1 per cent (year-on-year) to US dollars 980 million in November 2018. Expenditure on merchandise imports declined by 9.1 per cent (year-on-year) for the first time since June 2017 to US dollars 1,765 million in the same month narrowing the trade deficit. Exports grew by 4.1 per cent while imports contracted by 9.1 per cent in November 2018 (year-on-year).

The decline in consumer and investment goods contributed to the drop in import expenditure reflecting mainly the impact of restrictions on personal vehicles and non-essential consumer goods imports

The relatively larger depreciation of the Sri Lankan rupee may also have contributed to curtailing imports, Central Bank said.  The growth in exports was driven by industrial exports while agricultural exports continued to decline. 

Under industrial exports, export earnings from textiles and garments increased notably in November 2018 mainly driven by exports to the USA.

In addition, garment exports to non-traditional markets such as India, Canada and Australia as well as the EU market increased along with textile and other readymade garments.

Earnings from petroleum products increased significantly during the period under review reflecting higher bunker and aviation fuel prices despite a slight reduction in export volumes in comparison to that of November 2017.

Export earnings from machinery and mechanical appliances food, beverages and tobacco, rubber products and base metals and articles rose in November 2018.

However, export earnings from printing industry products, gems, diamonds and jewellery and leather products, travel goods and footwear declined.