Trade Deficit Contracts 6% Jan-Feb
By Mario Andree
Sri Lanka’s trade deficit contracted six per cent during the first two months of this year to US$ 1.23 billion from US$ 1.3 billion a year ago, as imports contracted 5.5 per cent against export contraction of 5.3 per cent over last year.
According to data released by the Central Bank of Sri Lanka, export earnings during the first two months of this year reached US$ 1.89 billion, down 5.3 per cent from nearly US$ 2 billion recorded in the same period last year.
Data also highlighted that imports into the country during the first two months of this year had reached US $ 3.11 billion from US$ 3.3 billion recorded in the same period last year.
Trade deficit in February contracted 0.4 per cent to US $ 572 million from US $ 574 million a year ago, though exports declined 3.7 per cent during the month as against a decline of 2.5 per cent in imports.
Exports in February this year reached US $ 952 million, down 3.7 per cent compared to US $ 989 million a year ago, while imports to the country reached US $ 1.52 billion, down 2.5 per cent from US $ 1.56 billion.
Though there was a slight reduction in exports during the first two months of this year, the Central Bank says “export earnings exhibited a recovery towards pre-pandemic levels since the peak of the second wave of COVID-19 spread in Sri Lanka, reaching levels close to those recorded in the same month of 2020.”
Earnings from the export of industrial goods declined by 6.3 per cent in February 2021, compared to a year ago, with decline in earnings recorded from petroleum product exports by 60.8 per cent and textiles and garments by 5.3 per cent.
Earnings from garment exports to the EU increased, while exports to the USA and other destinations declined.
Export earnings from agricultural goods increased by 5.9 per cent in February 2021, compared to a year ago, contributed mainly by spices, coconut and tea.
Mineral exports in February 2021 were higher than that of February 2020, mainly due to the increase in exportation of items.
On the importation front, the increase in expenditure on intermediate goods, and machinery and equipment categorised under investment goods contributed to the pickup in expenditure.
Expenditure on the importation of consumer goods declined by 16.7 per cent in February 2021, compared to February 2020, with a 3.0 per cent reduction in food and beverages and a 26.4 per cent reduction in non-food consumer goods.
Expenditure on the importation of intermediate goods increased by 3.8 per cent in February 2021 compared to a year ago.
Import expenditure on investment goods declined by 4.7 per cent in February 2021, compared to February 2020.