Sri Lanka’s June exports, imports down; trade deficit expands

Sri Lanka’s export earnings in June fell 5.0 percent from a year ago to US $ 897 million bringing the total decline in exports during the first six months of this year to 5.8 percent to US $ 5.1 billion, the Central Bank data showed.  

This is the sixteenth month in a row that Sri Lanka’s exports to the rest of word have declined. But the country’s economic prosperity is largely depends on exports and foreign direct investments. 
During the first six months of 2016, the total exports contracted 5.8 percent yoy to US $ 5.1 billion. 
The import expenditure also followed suit, albeit declining by a much slower pace of 0.2 percent year-on-year (yoy) in June to US $ 1.7 billion. 

The cumulative imports for the first six months decreased 2.4 percent yoy to US $ 9.3 billion. 
The trade deficit in June rose 6 percent yoy to US $ 779 million while the first six months’ cumulative trade deficit rose 2.2 percent to US $ 4.2 billion. 
While the global commodity price slump has partly contributed to the fall in trade with other countries in recent times, the dismal external trade performance by Sri Lanka is caused by inherent issues. 

The Central Bank this week said it would keep the exchange rate from appreciating to make the country’s exports competitive.
Meanwhile, during the first seven months earnings from tourism to the country – the only bright spot in a gloomy economic picture – increased to US $ 1.9 billion, an increase of little over US $ 300 million from June. 

The strong earnings were supported by the arrivals, which rose 16.7 percent to 1.17 million during the same period.

Further the worker remittances, which have been buttressing the country’s balance of payment for years, rose 3.8 percent yoy to US $ 4.2 billion during the first seven months. 
By end of July, the gross official reserves were estimated at around US $ 6.5 billion.