Lanka Trade Gap Widens

Sri Lanka’s trade gap has widened 34.1% to $827.5 million in March from a year earlier, official data from the central bank showed. The cumulative trade deficit in the first quarter of 2017 has increased 35% to $2,505 million from the same period last year.

Exports rose 9.8% to $1,042 million in March, while imports grew at a faster 19.4% to $1,869 million from a year earlier. Export earnings passed the $1 billion mark in March for the first time since March 2015, led by agricultural exports followed by industrial exports, LBO reported.

Agricultural exports grew for the fourth consecutive month, registering an increase of 28.3%, to $257 million in March.

Seafood exports have also increased by 75.2% reflecting a substantial increase in seafood exports to the EU market, following the removal of the fisheries ban.

Earnings from industrial exports, which represent about 75% of total exports, grew 4.7% to $779 million led by higher earnings from textile and garment exports. Export earnings from textiles and garments increased by 2.6% to $453 million in March, reflecting increased demand from the EU market.

Expenditure on imports increased by 19.4% in March and this was the highest import growth recorded during a month, since October 2014.

The largest contribution (76.9%) to the overall growth was from intermediate goods, followed by consumer goods (15.9%) and investment goods (6.4%). Expenditure incurred on imports of intermediate goods increased in March by 32.6% to $948 million, led by fuel imports.

Consumer goods imports have increased by 11.5% to $468 million driven by the increase in imports of food and beverages such as rice, dairy products and fruits.