July 27, Colombo: Sri Lanka’s trade deficit expanded to US$ 932 million in May 2011 compared to last year, the Central Bank reported Wednesday in its External Sector Performance Review.
Although external trade continued to perform well in May 2011 and the exports earnings grew by 34.3 percent to US$ 832 million, expenditure on imports also increased by 67.9 percent to US$ 1.764 billion, the figures released by the Economic Research Department of the Central Bank showed.
Accordingly, the cumulative earnings from exports increased by 46.9 per cent to US$ 4.3 billion during the first five months of the year and expenditure on imports have grown 48.1 percent to US$ 7.76 billion.
The Bank reported that the industrial sector, particularly the textiles and garments sector led the growth in export earnings while agricultural exports also performed well in May 2011 reflecting higher prices in the international market.
Tea and rubber prices have also gone up fetching US$ 4.66 per kg of tea and US$ 5.15 per kg of rubber.
Earnings from tourism have also grown 54.5 percent to US$ 318 million during the first five months of the year.
Higher international prices and high domestic demand have led the rise in the expenditure on imports in May 2011, the Bank noted in its report.
During May 2011, workers have contributed US$ 414million, an increase of 36.8 percent over May 2010, adding to a cumulative inflow of US$ 2.1 billion for the first five months of 2011.
At the end of June 2011, the gross official reserves continued to remain above the targeted level and stood at US$ 7.5 billion, the Central Bank noted.
Sri Lanka in the medium term expects an 8.5 percent economic growth for this year with all sectors contributing to the growth.