Sri Lanka trade deficit narrows to US$ 390 million in November 2023

By: Staff Writer

Colombo (LNW): The deficit in the merchandise trade account narrowed to US dollars 390 million in November 2023, compared to the deficit of US dollars 449 million recorded in November 2022 as well as US dollars 683million recorded in October 2023.

In the meantime, the cumulative deficit in the trade account during January to November 2023 narrowed to US dollars 4,414 million from US dollars 4,827 million recorded over the same period in 2022.

Earnings from merchandise exports recorded a year-on-year marginal increase in November 2023 for the first time since September 2022.

Accordingly, earnings improved by 0.4 per cent to US dollars 999 million in November 2023, over November 2022 as well as over US dollars 928 million in October 2023.

An increase in earnings was observed in agricultural exports and mineral exports, while a decline was recorded in industrial exports.

Cumulative export earnings recorded a decline of 9.4 per cent during January to November 2023 to US dollars 10,909 million, over the same period in the last year.

Earnings from the exports of industrial goods declined in November 2023, with a significant share of the decline being contributed by garments. Accordingly, exports of garments to most of the major markets (the USA, the EU, and the UK) recorded declines.

However, earnings from garment exports improved notably in November 2023, compared to October 2023.

Earnings from the exports of agricultural goods improved in November 2023, compared to a year ago, led by tea (mainly, instant tea) exports.

An increase of earnings from overall tea exports resulted from the higher export volumes although the unit price of tea exportsin November 2023 was lower than a year earlier. Further, export earnings from coconut related products (mainly, fibres and coconut oil) and spices (mainly, cinnamon) increased due to higher export volumes.

Meanwhile, there was a decline in export earnings from minor agricultural products (primarily, areca nuts), natural rubber, and vegetables.

Expenditure on merchandise imports declined by 3.9 per cent (year-on-year) to USdollars 1,389 million in November 2023, compared to US dollars 1,445 million in November 2022and US dollars 1,610 million in October 2023. A decline in import expenditure was observed in intermediate goods, mainly resulting from lower expenditure on fuel imports.

However, an increase was recorded in imports of investment goods and consumer goods partly due to relaxation of import restrictions. Meanwhile, cumulative import expenditure during January to November 2023 declined by 9.1 per cent to US dollars 15,323 million over the corresponding period in the last year.

Expenditure on the importation of consumer goods increased in November 2023, compared to a year ago, mainly due to the increase in expenditure on non-food consumer goods.