Sri Lanka’s external trade deficit widened by 32.9 percent year-on-year (YoY) to US$ 1.05 billion last October, as a 2-month export growth spurt slowed down, while importation of equipment for the Colombo Port City project boosted imports.
Exports earnings in October slowed down to a 0.9 percent YoY growth, to US$ 855 million.
The industrial exports category showed a 4.3 percent growth YoY with textiles and garments products, the country’s main exports, growing marginally by 1.3 percent YoY to US$ 391.6 million through non-traditional markets, after experiencing several months of decline due to shocks in key markets.
Rubber product exports increased by 8.1 percent YoY to US$ 68.3 million through sale of surgical gloves and tyres, while machinery and mechanical appliance exports increased 32.6 percent YoY to US$ 36.3 million mainly through engineering equipment.
Agricultural exports fell by 9.1 percent YoY to US$ 197.8 million, with tea, which boosted total export revenue in the previous two months through production cuts, recording a 9.4 percent YoY fall in October to US$ 108.1 million due to lower volumes, despite the higher prices.
Coconut exports increased just 2.8 percent YoY to US$ 33 million, while spice exports fell 21.8 percent YoY to US$ 28.7 million.
Imports in October increased 16.4 percent YoY to US$ 1.91 billion driven mainly through increases in investment good imports which increased 52.2 percent YoY to US$ 628.7 million.
This was mainly due to bringing in a dredger vessel to be utilized for the reclamation of land for the Colombo Port City project, which pushed the transportation equipment category up 237.5 percent YoY to US$ 258.5 million. Excluding this investment good import, total imports increased 5.2 percent YoY for October.
Machinery and equipment imports were also up 12.5 percent YoY to US$ 235.6 million.
Intermediate goods imports increased 9.6 percent YoY to US$ 899 million, with textiles and textile article imports increasing 35.5 percent YoY to US$ 232.4 million, while fuel imports increased 10.9 percent YoY to US$ 253.7 million helped by the demand for thermal power generation as the country experienced a drought during the period.
In the consumer goods segment, imports of food and beverages increased 44.1 percent YoY to US$ 159.8 million, mainly due to increased demand for sugar.
Vehicle imports fell 55.6 percent YoY to US$ 64.6 million due to a decrease in 3-wheeler imports, despite a substantial increase in imports of lorries and agricultural tractors.

For the first 10 months of the year, the trade deficit widened 3.7 percent YoY to US$ 7.23 billion, with exports falling 2.6 percent YoY to US$ 8.62 billion, and imports increasing 0.2 percent YoY to US$ 15.85 billion.
Textiles and garments exports, which claimed nearly half of the total exports with US$ 4.11 billion, increased 2.3 percent YoY, while tea exports fell 6.1 percent YoY to US$ 1.06 billion. Rubber product exports fell 0.4 percent YoY to US$ 644.3 million.
Of the imports for the 10 months, expenditure on vehicles fell 42.8 percent YoY to US$ 672.5 million due to increased taxation, while machinery and equipment imports increased 20.8 percent YoY to US$ 2.25 billion, and building material imports increased 16.5 percent YoY to US$ 1.27 billion.
Textile and textile product spending increased 17.6 percent YoY to US$ 2.22 billion, while the fuel bill fell 15.7 percent YoY to US$ 1.93 billion.

Worker remittances marginally up; tourism earnings up 14%

Inward remittances, Sri Lanka’s leading foreign exchange earner, increased 0.4 percent last October to US$ 607.5 million, while earnings from tourism were recorded at US$ 249.3 million, an increase of 13.7 percent, equivalent to the growth in arrivals.
Most of Sri Lanka’s foreign remittances are from the Middle East, where economies remained suppressed until December, where an agreement to cut oil production pushed the price of an oil barrel above US$ 50.
For the first 10 months of 2016, remittance inflows increased 3.5 percent YoY to US$ 5.99 billion, while tourism earnings increased 14.6 percent—equal to the arrivals growth—to US$ 2.75 billion, with India, China, the UK, Germany and France leading the arrivals.
Meanwhile, foreign direct investments, including loans for Board of Investment and publicly listed companies, fell 34.4 percent YoY to US$ 444.5 million from January to October, while the Colombo Stock Exchange recorded a net outflow of US$ 10.8 million from a US$ 7.9 million net inflow YoY.
Inflows to government securities increased 60.9 percent YoY to US$ 4.43 billion during the 10 months as well.