Sri Lanka's trade gap narrows 9.1-pct in January 2016

May 06, 2016 (LBO) – Sri Lanka’s exports fell 2.5 percent to 893.9 million US dollars in January 2016 from a year earlier while imports fell at a faster 5.5 percent to 1,589.1 million US dollars, official data showed.

The deficit in the trade account contracted in January 2016, by 9.1 percent from a year earlier to 695 million US dollars compared to 765 million US dollars in January last year.

The Central Bank said earnings from exports declined for the eleventh consecutive month in January largely reflecting continuous decline recorded in commodity prices in the international market.

Export earnings from textiles and garments, which contributed nearly 52 percent to the total exports, improved by 13.3 percent in January 2016, reversing the declining trend prevailed in last quarter of 2015.

The Central Bank said garment exports to both traditional and non-traditional markets have improved during the month.

The continuous weakening of demand for Ceylon tea from the major tea export destinations mainly Russia, Turkey and some Middle-Eastern countries has caused export earnings from tea to decline by 12.4 percent in January 2016.

Import expenditure on textile and textile articles have increased by 25.4 percent, in January 2016 owing to the 34.0 percent increase recorded in fabrics imports.

Expenditure on importation of vehicles for personal and investment purposes have declined significantly by 12.6 percent and 42.3 percent respectively in January 2016.

Due to the tax increases, importation of personal motor vehicles, such as motor cars and motor cycles and road vehicles such as lorries, trishaws and buses which import specially for investment purposes have declined during the month.

Import expenditure on fuel have also declined significantly by 39.6 percent to 175 million US dollars, due to the drop in average import prices of all categories of fuel together with lower import volume of refined petroleum and coal.

In January 2016, the Central Bank said main import origins were China, India, Japan, UAE and South Korea, accounting for about 54 per cent of the total imports.