Sri Lanka’s trade deficit in 2016 widened 8.4 percent year-on-year (YoY) to US $ 9.09 billion with export earnings falling 2.2 percent YoY to US $ 10.3 billion, while the expenditure on imports rising 2.5 percent YoY to US $ 19.4 billion, the country’s Central Bank said.
According to the bank, the largest contribution to the decline in export earnings came from transport equipment as a result of the base effect, while petroleum products, tea and spices also contributed negatively.
The agricultural exports during 2016 fell 6.3 percent YoY to US $ 2.33 billion largely due to the earnings from tea exports falling 5.3 percent YoY to US $ 1.27 billion. Spice exports also fell 16 percent YoY to US $ 317.1 million. Apparel exports during 2016 rose a modest 1.3 percent YoY to US $ 4.88 billion. Export of rubber products, which mainly consist of tyres, rose 0.9 percent YoY to US $ 767.9 million.
Seafood exports during the year also rose 4 percent YoY to US $ 169.6 million. The European Union lifted the ban of fisheries products from Sri Lanka in the mid part of 2016.
The export income in December rose 4.7 percent YoY to US $ 859 million.
Meanwhile, the Central Bank said the cumulative import expenditure in 2016 was boosted mainly due to higher imports of machinery and equipment, textiles and textile articles and gold.
In addition, building material, sugar and confectionery and medical and pharmaceuticals also contributed considerably to the increase in import expenditure.
The import expenditure on investment goods, which includes machinery, building material and transport equipment, rose 13.8 percent YoY to US $ 5.2 billion in 2016.
However, the import expenditure on vehicle imports during 2016 fell 41.5 percent YoY to US $ 794.8 million, while the full-year fuel bill also fell 8.1 percent YoY to US $ 2.48 billion.
However, the Central Bank said the December fuel bill rose 51.8 percent YoY to US $ 328.2 million due to the higher refined petroleum and coal imports for thermal and coal power generation as a result of the prevailing drought.
The import expenditure in December rose 10.4 percent YoY to US $ 1.81 billion.
On a positive note, the income from tourism and workers’ remittances rose 18 percent and 3.7 percent YoY to US $ 3.52 billion and US $ 7.24 billion, respectively, in 2016.
Inflows to the Colombo Stock Exchange during 2016 rose 375.3 percent YoY to US $ 19.1 million.
However, during the year 2016, the overall BOP is estimated to have recorded a deficit of US $ 499.7 million, in comparison to a deficit of US $ 1.48 billion recorded during 2015.