Sri Lanka export earnings decline in October, ten-month trade deficit over US$ 7.7 billion

Dec 23, Colombo: Sri Lanka’s cumulative trade deficit expanded to US$ 7.734 billion in the first ten months of 2011 as earnings from exports declined for October by 4.9 percent, the Central Bank reported Friday in its External Sector Performance Review.

Exports of tea, rubber and minor agricultural crops declined in the month of October 2011 to US$ 882 million. Imports expenses due to high growth in investment and intermediate goods, increased by 41.4 percent to US$ 1.751 billion during the same period.

The cumulative earnings grew 23.4 percent to US$ 8.702 billion year-on-year for the first ten months in 2011 while expenditure on imports for the first ten months of 2011 increased by 50.7 per cent to US$ 16.436 billion.

The total inflows to the government, including the proceeds of the International Sovereign Bond issue, and grants for infrastructure development amounted to US$ 3.507 billion, during the first ten months of 2011.

Industrial exports grew 12.8 percent in October 2011 compared to the corresponding month of 2010 but earnings from agricultural exports, which accounted for 23 percent of total exports, declined by 10.3 percent, mainly due to decline in tea export earnings by 12.1 percent, year-on-year, in October 2011, the Bank reported in a release.

Leading the growth in industrial exports Textile and garments exports grew by 12 percent, year-on-year, in October 2011.

Imports of petroleum were responsible for 42.7 percent increase in expenditure on imports for October.

For the first eleven months of 2011, earnings from tourism grew at a healthy rate of 46.7 percent to US$ 736 million compared to the corresponding period of 2010, the Central Bank reported.

In the first ten months of 2011 Sri Lankan workers remitted US$ 4.203 billion, an increase of 24.3 percent over the same period last year.

Total external reserves, which include gross official reserves and foreign assets of commercial banks, also increased to US$ 8.136 million by end October 2011 from US$ 8.035 billion by end 2010.

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