Sri Lanka’s trade deficit expands to US$ 4.25 billion in first half of 2011

Aug 29, Colombo: Sri Lanka’s trade deficit expanded to US$ 4.25 billion in the first half of 2011, the Central Bank reported Monday in its External Sector Performance Review.

Although Earnings from exports grew by 35.2 percent in the first six months of the year to US$ 5.06 billion, cumulative expenditure on imports increased by 46.5 percent to US$ 9.31 billion, the figures released by the Economic Research Department of the Central Bank showed.

Earnings from exports grew by 31.6 percent in June 2011 mainly from the contributions of industrial exports, particularly textiles and garments and rubber products, the Bank reported. However, earnings from food, beverages and tobacco exports decreased due to lower volumes.

Domestic consumers’ increased demands for textiles and clothing imports contributed significantly to the import expenditure in June 2011 due to the higher volumes imported and the higher prices.

During June 2011, country’s workers remitted 17.3 percent more to state coffers amounting to US$ 404 million over the same month of 2010. In the first half of 2011, workers have remitted a total of US$ 2.51 billion.

The Central Bank said the country’s reserves increased to US$ 8.1 billion by end July 2011 mainly due to the receipt of proceeds of the fourth International Sovereign Bond of US$ 1 billion.

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