COLOMBO: Despite an increase in exports Sri Lanka’s trade deficit widened 34.1 percent to US$ 827.5 million in March 2017 from US$ 617.0 million a year earlier, according to the Central Bank data released in its External Sector Performance Review on Tuesday. On a cumulative basis, in the first three months of 2017, the trade deficit increased by 35.0 percent to US$ 2.504 billion from US$ 1.855 billion recorded during the same period of 2016. Earnings from exports passed the US dollars 1 billion mark in March 2017 for the first time since March 2015, amounting to US$ 1.042 billion and registering a growth of 9.8 percent (year-on-year). This increase was mainly led by agricultural exports followed by industrial exports.
On a cumulative basis, export earnings during the first three months of 2017 stood at US$ 2.774 billion, reflecting 1.3 percent increase (year-on-year) with increased earnings from exports recorded in March 2017. However, expenditure on imports increased by 19.4 percent (year-on-year) to US$ 1.869 billion in March 2017. This was the highest import growth (year-on-year) recorded during a month, since October 2014. On a cumulative basis, expenditure on imports during the first three months of 2017 stood at US$ 5.279 billion, reflecting an increase of 14.9 percent (year-on-year), led by expenditure incurred on fuel, gold and rice. Tourist arrivals declined in March 2017 and earnings from tourism reduced by 2.5 percent, year-on-year to US$ 322.7 million in March 2017. However, in the first three months of the year revenues from tourism increased by 3.4 percent to US$ 1.037 billion.
Worker’ remittances declined by 12.2 percent, year-on-year, to US$ 593.4 million in March 2017 compared to US$ 675.7 million in March 2016 as the adverse economic and geopolitical conditions in the Middle Eastern region continued. The cumulative inflow from workers’ remittances also declined by 3.3 percent to US$ 1.734 billion during the first quarter of 2017, in comparison to the corresponding period of 2016. During the first quarter of the year, foreign investments in the CSE recorded a net inflow of US$ 83.4 million, including net inflows of US$ 35.2 million from the secondary market and inflows of US$ 48.2 million to the primary market. Sri Lanka’s gross official reserves, as at end March 2017, amounted to US$ 5.1billion, equivalent to 3.1 months of imports, while total foreign assets amounted to US$ 7.1 billion, equivalent to 4.2 months of imports. The rupee recorded a modest depreciation of 1.8 per cent against the US dollar during the period from end 2016 to 5 June 2017.
