Home » Sri Lanka’s trade deficit widened in February 2024 amidst import surge

Sri Lanka’s trade deficit widened in February 2024 amidst import surge


March 29, Colombo (LNW): The deficit in the merchandise trade account widened to US dollars 319 million in February 2024 from US dollars 39 million recorded in February 2023, mainly with a higher increase in imports than the increase in exports, Central Bank announced. . 

Similarly, the cumulative deficit in the trade account during January to February 2024 also widened to US dollars 860 million from US dollars 484 million recorded over the same period in 2023.

Earnings from merchandise exports increased by 7.9 per cent to US dollars 1,059 million in February 2024 compared to US dollars 982 million in February 2023. 

An increase in earnings was observed in all major categories of exports, including industrial, agricultural, and mineral. 

An increase in industrial goods exports in February 2024 compared to the same period in 2023 was mainly contributed by petroleum products due to the increase in volumes of bunkering and aviation fuel exports.

 Earnings from exports of agricultural goods improved in February 2024 compared to a year ago mainly driven by tea due to both higher export volumes and prices. 

Earnings from mineral exports also increased marginally in February 2024. Meanwhile, earnings from exports in February 2024 increased compared to January 2024, led by higher textiles and garment exports.

Expenditure on merchandise imports recorded an increase of 35.0 per cent to US dollars 1,378 million in February 2024 compared to a significantly lower base of US dollars 1,021 million in February 2023.

This increase was a result of increases across all major import categories as a result of the relaxation of import restrictions, normalisation of economic activities and loosening monetary conditions. 

The increase in expenditure on consumer goods imports in February 2024 compared to a  year ago was due to a broad-based increase in expenditure on both food and non-food consumer goods. 

Meanwhile, expenditure on intermediate goods imports increased driven by higher fuel and textile imports compared to February 2023.

 In contrast, expenditure on wheat imports decreasedsignificantly led by lower import volumes in February 2024. 

Expenditure on investment goods also recorded a broad-based increase, which was driven by machinery and equipment (mainly cranes) and building materials (mainly iron and steel). 

Meanwhile, expenditure on imports in February 2024 declined notably compared to January 2024, driven by lower expenditure on all categories of fuel, led by the availability of stocks and reduced demand.

 Earnings from tourism in February 2024 were estimated at US dollars 346 million, in comparison to the estimates of US dollars 342 million for the previous month and US dollars 162 million for February 2023.

 The major outflows from the services sector in February 2024 were mainly attributed to air transport, sea transport, and technical, trade-related and other business services.

Total services sector outflows were estimated at US dollars 193 million in February 2024, in comparison to US dollars 152 million in February 2023.

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