Trade Deficit Widens 45% to $5.5B
By Paneetha Ameresekere
Pressure on the rupee to depreciate kept-up its momentum with the trade deficit widening sharply by 44.52 per cent (USD 1,697 million) year on year (YoY) to USD 5,509 million in the first eight months of this y e a r , C e n t r a l Bank of Sri Lanka (CBSL) data released yesterday (19) showed.
Widening of the trade deficit was complemented by imports accelerating by 30.7 per cent YoY to USD 13,411 million and exports in comparison decelerating by 22.6 per cent YoY to USD 7,903 million in the review period. Import growth was fuelled by fuel imports increasing by 41.7 per cent YoY to USD 2,395.9 million in the first eight months of the year. Fuel is Sri Lanka’s single biggest import comprising 17.87 per cent of all imports in the review period.
Fuel imports comprise the import of crude oil, refined petroleum products and coal. Meanwhile, merchandise exports in the review period were aided by the increase in garment and textile exports which grew by 23.5 per cent YoY to USD 3,122.6 million.
Textile and garment exports are Sri Lanka’s single biggest merchandise export and the second largest foreign exchange (FX) earner. Textile and garment exports’ three biggest markets in descending order are the USA, EU and the UK.
Exports of textile and garments among others like seafood exports to the EU are aided by the GSP+ duty-free facility. Meanwhile, seafood exports in the review eight-month period increased by 24.3 per cent YoY to USD 165.5 million. According to the EU, 53 per cent of all exports by Sri Lanka to the EU are aided by the GSP+ duty-free facility.