COLOMBO: 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.
