Exports up only 1% in first nine months; trade gap contracts

„But trade deficit narrows significantly due to sharp decline in imports „Personal vehicle imports halve US$ 566.5mn; fuel bill down 7.4% „Worker remittances fall 6.6% to US$ 4.9bn; tourism earnings down to US$ 2.5bn

Sri Lanka’s export earnings in the first nine months of 2019 rose only by 1 percent from a year ago to US$ 8.9 billion. However, the trade gap had narrowed significantly due to the slowdown in imports, the latest data released by the Central Bank showed.

The trade deficit for the first nine months narrowed to US$ 5.6 billion from US$ 7.9 billion a year ago as imports for the period fell 13.4 percent year-on-year (YOY) to US$ 14.6 billion.

However, the trade deficit expanded in the month of September 2019 to US$ 758 from US$ 713 a year ago.

Since the latter part of last year, Sri Lanka has had discouraged non-essential consumption imports slapping higher taxes and other restrictions.

Importation of personal vehicles, a key source of foreign exchange outflow, has slumped amid higher import duties and financing restrictions.

Vehicle imports in the month of September fell 49.2 percent YOY to US$ 70.1 million and the cumulative expenditure for the nine months fell 54 percent YOY to US$ 566.5 million.

Due to lower global oil prices, Sri Lanka’s fuel bill—crude oil, refined petroleum and coal— also fell 7.4 percent YOY in the first nine months to US$ 2.9 billion. Fuel bill for September fell 10.7 percent YOY to US$ 353.7 million.

Sri Lanka’s exports in the month of September contracted 9.8 percent YOY to US$ 952.1 million as both industrial and agricultural exports fell 8.4 percent YOY and 14 percent YOY respectively.

Textile and garments exports fell 5.5 percent YOY to US$ 450.2 million during September 2019, but cumulative earnings for the nine months rose 6.6 percent YOY to US$ 4.2 billion.

Tea exports, the largest agricultural export of Sri Lanka, fell 10 percent YOY in September to US$ 110.4 million and for the nine months by 6.2 percent YOY to US$ 1.09 billion.

Meanwhile, worker remittances for the month of September rose 3.3 percent YOY to US$ 516 million. But the cumulative figure for the nine months fell 6.6 percent YOY to US$ 4.9 billion.

Earnings from tourism, impacted by Easter Sunday attacks in April fell 27 percent YOY in September to US$ 204 million and 20.5 percent YOY for the nine months to US$ 2.5 billion.