Sri Lanka’s trade balance expanded in August as earnings from merchandise exports fell due to continuous decline in apparel exports, while the imports during the month remain subdued.
August trade deficit expanded to $307 mn from $260 mn a year ago. However, the cumulative deficit in the trade account during January to August 2023 narrowed to $2,964 mn from $3,889 mn recorded over the same period in 2022, due to a larger decline in imports offsetting the decline in exports.
Earnings from merchandise exports in August were reported at $1, 119 mn, down 8.7 percent year-on-year (YoY). Nevertheless, earnings from exports in August 2023 marked the highest monthly earnings so far in 2023.
Industrial exports, led by textile and garment exports fell 9.8 percent YoY to $871.7 mn. Textile and garments exports fell 23.1 percent YoY to $436.2 mn amid continued slowdown in demand. It is estimated that Sri Lanka would lose about $1 bn from apparel exports this year compared to last year.
Rubber products exports, mainly consisting of tyres also fell 19.1 percent YoY to $78.2 mn. Sri Lanka’s agricultural exports, led by tea, fell 4.5 percent YoY to $242.9 mn August 2023. Tea exports declined 3.8 percent YoY to $119.6 mn. Seafood exports also fell 30.8 percent YoY to $17.7 mn. Export of spices recorded an 18.2 percent YoY increase to $47.4 mn August 2023. Meanwhile, Sri Lanka’s import bill in August 2023 fell 4 percent YoY to $1, 426 mn.
Consumer goods imports rose 15.9 percent YoY to $268.1 mn. A sharp increase of nearly 750 percent was seen in the import of telecommunication devices to $10.9 mn from a year ago, as the government removed the import restrictions on such products.