• October trade gap widens to US$ 683mn compared to US$ 284mn YoY
• Imports surge 20.6% YoY to US$ 1.6bn; exports decline 11.8% to US$ 928mn
• However, cumulative trade gap narrows to US$ 4bn from US$ 4.3bn YoY

Sri Lanka’s trade deficit widened in October amid sharp increase in imports expenditure and continuous decline in exports income, the data released by the Central Bank showed.
The trade gap widened to US$ 683 million in October compared to a deficit of US$ 284 million a year ago as well as US$ 378 million a month ago as exports fell 11.8 percent year-on-year (YoY) to US$ 928 million while imports surged 20.6 percent YoY to US$ 1, 610.5 million.
However, the cumulative deficit in the trade account during January to October 2023 narrowed to US$ 4,024 million from US$ 4,377 million recorded over the same period in 2022. 
According to the Central Bank, the October 2023 import expenditure figure was the highest since April 2022.
Sri Lanka relaxed all the import restrictions about two months ago, barring vehicle imports, with the foreign exchange situation in the country normalising.
All main export categories recorded declines in October with industrial and agricultural exports falling over 11 percent YoY.

Sri Lanka’s main industrial products, apparels & textiles extended their downward trend to October to record a decline of 20.1 percent YoY to US$ 354.2 million amid slowdown in orders from Sri Lanka’s major Western markets.
Earnings from agricultural exports fell 11.5 percent YoY to US$ 199.7 million as tea exports fell 12 percent YoY to US$ 95.6 million.  Meanwhile, expenditure on consumer goods rose 30.4 percent YoY to US$ 263.4 million with both food and non-food imports rising.

The fuel bill for the month rose 24.9 percent YoY to US$ 495.3 million as a result of higher import volumes.  
Expenditure on investment goods imports rose 37.7 percent YoY to US$ 259.2 million amid higher machinery and equipment, building material and transport equipment imports. 
Cushioning the trade deficit, workers’ remittances exceeded US $ 500 million in October 2023, while earnings from tourism continued the notable improvement in October 2023, compared to a year ago. 
Foreign investments in the government securities market continued to record a net outflow in October 2023. However, year-to- date net inflows continued to be positive.  Gross Official Reserves amounted to US$ 3.6 billion by end October 2023. 
Exchange rate remained broadly stable during the month of October 2023. During the year up to 30 November 2023, the Sri Lankan rupee remained appreciated by 10.4 percent against the US dollar.