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Sri Lanka external trade crunched in October 2014: Trade deficit widen significantly: Central bank
13 Dec, 2014 11:03:12
Dec 13, 2014 (LBO) – Sri Lanka's exports declined by 13.7 percent, to 899 million US dollars in October 2014 from a year earlier with largest contribution from textiles and garments followed by transport equipment and rubber products, all of which are categorized under industrial exports, official data showed.
Apparel exports were down 8.7 percent to 398.4 million US dollars in October 2014 with the decline in garment exports to the EU and to the USA by 10.1 percent and 8.4 percent, the Central Bank said.

Exports of machinery and mechanical items had declined 11.4 percent to 29.1 million US dollars and rubber products also dropped 17.7 percent to 77.8 million US dollars.

Agricultural exports were down 10.3 percent to 231.1 million US dollars with tea shrinked 8.5 percent to 134.3 million US dollars. Spices export also were down 40.3 percent to 24.5 million US dollars.

The regulator says export earnings from spices declined continuously due to the lower production in comparison to the previous year while tea exports also declined due to the decline in both export prices and volumes.

Imports grew 25.6 percent to 1,750 million US dollars mainly due to the increase in imports of fuel followed by imports of personal vehicles such as motor cycles and motor cars for personal use.

Despite the decline in refined petroleum imports, expenditure on fuel had increased due to increase in crude oil imports, the Central Bank said. Further, rice imports also were increased during the month of October as a result of a shortfall in domestic rice production during the year.

Intermediate goods were up 24.7 percent to 941.7 million US dollars in the month of October 2014 with fuel imports were up 45.7 percent to 329.1 US dollars, Wheat and Maize up by 53.4 percent to 35.1 million US dollars. Paper and paperboard articles were up 43.4 percent to 52 million US dollars.

Consumer goods up 43.8 percent including 97.4 percent growth to 117.7 million dollars of vehicles.

Investment goods imports were up by 12.9 percent to 396.2 million US dollars with machinery and equipment up 14.4 percent to 197.6 percent while transport equipment were up by 18.3 percent to 62.9 million US dollars and building materials up 8.8 percent to 135.2 million US dollars.

As the growth of imports weighed on the export earnings, the trade deficit widened to 852 million US dollars in October 2014, compared to 352 million US dollars in October 2013.

The trade deficit during the first ten months of 2014 widened by 4.3 percent over the corresponding period in 2013.

Trade deficits are caused when market participants in a country earn and spend money from selling abroad sources other than goods.

In October, earnings from tourism are estimated at 176 million US dollars in comparison to 144 million US dollars recorded in October 2013.

Worker remittances (exports of labour) rose 4.7 percent to 600 million US dollars in October 2014 compared to 573 million US dollars in the same period of 2013.

Long term loans obtained by the government during the year to end October 2014 amounted to 1,411 million US dollars.

Foreign investments in the government securities market from January to end October 2014 recorded a net outflow of 109 million US dollars, while foreign investments in the Colombo Stock Exchange (CSE) up to the end November 2014 recorded a net inflow of 150 million US dollars, the regulator said.

Inflows to Licensed Commercial Banks (LCBs) and Licensed Specialised Banks (LSBs) during the first ten months in 2014 amounted to 450 million US dollars with an inflow of 250 million US dollars received from the international bond issuance by the National Saving Bank during September 2014.

In the nine months to October exports up 9.7 percent to 9,186.7 million US dollars, imports up 7.3 percent to 15,972.5 million US dollars and the trade gap widen 4.3 percent.

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