August trade deficit widens 32% amid rising imports

9 October 2014 05:53 am - 0 - {{hitsCtrl.values.hits}}

A A A

By Dilina Kulathunga
The trade deficit widened for the second month in a row as the August trade deficit expanded by 32 percent to US $ 733.2 million, as the country imported more than it did a year ago.

However, the trade deficit for the first eight months contracted by 7 percent to US $ 5.17 billion as the exports grew 15 percent to US $ 7.4 billion, faster than the import growth of 5 percent to US $ 12.6 billion.

According to the country’s external sector performance report released by the Central Bank (CB), the August imports rose 17 percent year-on-year (YoY) to US $ 1.72 billion led by vehicle and fuel imports, as the country needed more refined oil to generate thermal power.

Meanwhile, the August exports managed to continue their upward trend despite at a slower pace of 8.0 percent YoY to US $ 991 million.
As usual, apparel led the export basket with earnings of US $ 429 million, recording a 17 percent YoY increase and contributing over 85 percent of export growth in August.

Despite calls from various quarters pointing out the need for diversification of the export commodities as well as markets, still apparel accounts for nearly 50 percent of total exports. Further, over 50 percent of the markets are still concentrated in traditional US and European markets.

Rubber product exports rose 6.1 percent YoY to US $ 82 million mainly due to tyre exports. Loadstar (Pvt.) Limited is the country’s largest value-added rubber exporter.

Transport equipment exports jumped to US $ 33 million from just US $ 6.2 million a year ago due to the export of a cruise ship.
All in all, industrial exports rose by 12 percent YoY to US $ 748 million.

Meanwhile, perhaps for the first time in the year, tea earnings narrowed 2.8 percent YoY to US $ 139 million, dragging the entire agricultural export basket by 3.1 percent to US $ 239 million.

The import expenditure was largely driven by refined oil imports, motor car and motorcycle imports and rice imports, as the country had to meet the short fall in local production during the year.

Fuel imports rose by 21 percent YoY to US $ 472 million, while vehicle imports rose by 49 percent to US $ 102 million.
Dairy product imports, on a positive note, declined by 16 percent YoY to US $ 24 million in August.
Overall, consumer goods imports rose by 23 percent YoY to US $ 328 million, intermediate goods by 21 percent to US $ 1,062 million and investment goods by 1.0 percent to US $ 334 million.

The lukewarm increase in investment goods imports caste doubts over the pace of domestic construction-related developments claimed to be taking place in the country.

It was only recently the local management consultancy, Gradient Alliance pointed out how higher import tariffs on construction material keep local construction work virtually unmoving.

The balance of payment (BoP) surplus is estimated to have surpassed US $ 2.15 billion as of end-August 2014 in comparison to a deficit of US $ 66 million for the corresponding quarter last year, the CB said.
Meanwhile, the gross external reserves, which measure the strength of the external position, amounted to US $ 9.2 billion, equivalent to 5.9 months of imports.

During August, tourism earnings increased by 22 percent YoY to US $ 203 million, while the earnings for the first eight months rose by 32 percent to US $ 1.45 billion from a year earlier.

The biggest foreign exchange earner, worker remittances, rose by 1.5 percent YoY to US $ 548 million in August, while the eight months’ cumulative flows amounted to US $ 4.5 billion, a 10 percent growth from the corresponding period last year.

The long-term loans obtained by the government during the first eight months amounted to US $ 1.17 billion compared to US $ 1.16 billion.

“Net inflows to the government securities market from January to end-August 2014 amounted to US $ 218 million, which comprised net inflows to Treasury bills and Treasury bonds amounting to US $ 37 million and US $ 181 million, respectively,” the CB said in a statement.

Further, foreign inflows to the Colombo Stock Exchange in August amounted to US $ 28 million compared to US $ 18 million in the same month last year and on a cumulative basis, the bourse received a net foreign inflow of US $ 56.7 million during the first eight months.

The licensed commercial and specialized banks raised a total of US $ 200 million foreign funds during the first eight months.

Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

Comments - 0

Add comment
Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

August trade deficit widens 32% amid rising imports

Comments - 0

Add comment

RECOMMENDED

UDA owned land in Thalawathugoda; UDA Minister Prasanna Ranatunga under the spotlight for forceful occupation of reserved land

Loss-making SMIB faces political pressure in recovering loans

Baltimore Bridge Collapse: MV Dali, SL authorities anchored in mystery?

Has Sri Lanka become a potential hub for the illegal wildlife trade?

Spotlight on Moragahakanda Development Project Moragolla villagers lose livelihoods and down to one meal a day

Ambitious Sri Lankan jobseekers ‘trafficked into Ukraine war zones’

Western purple-faced langurs see blue!

Most Viewed in News

New Visa procedure implemented

Belgian traveller scammed in Kalutara

Suspicious death of 23-year-old woman at hotel sparks concerns

23 year old youth ends up having his testicles removed

Street food vendor arrested for verbally harassing foreigner

A US “Kaputa”, a Lankan “Nariya” and a Presidential “Feast”

MIRROR CRICKET

How does CSK get best out of Pathirana?

Mendis, Mathews move up in ICC Test Rankings

Chamodi, Dewmi spins Sri Lanka U19 Women to big win

Amir, Wasim return to Pakistan national team

TODAY'S HEADLINES

100 Police personnel trained to target criminals operating on motorbikes

Catholic Church receives full report

Complaint lodged over Piumi Hansamali’s possession of Gota’s Range Rover

We are struggling with severe shortage of staff – Excise Chief

Mendis, Mathews move up in ICC Test Rankings

Security raised for Champions League ties after threat

SLA target four events at Paris Olympic Games

Chamodi, Dewmi spins Sri Lanka U19 Women to big win