Sri Lanka trade deficit surges amid economic recovery - LANKA BUSINESS ONLINE

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Trade Trends
01 Sep, 2010 11:14:01
Sri Lanka trade deficit surges amid economic recovery
Sept 01, 2010 (LBO) - Sri Lanka's exports grew 13.7 percent to 3.6 billion US dollars in the first half of 2010, and imports expanded 42.1 percent amid an economic recovery, expanding the trade deficit by 108 percent to 2.8 billion US dollars, official data show.
In the month of June exports grew 23.4 percent to 697.4 million US dollars, with tea exports up 15.4 percent to 120 million US dollars amid better prices. The average export price of tea was 4.3 US dollar a kilogram, up 11 percent from a year earlier the Central Bank said.
Industrial exports were up 24.7 percent to 523.4 million US dollars. Garment and apparel exports grew 23.8 percent to 304 million US dollars.
The Central Bank said garment exports to the United States were up 34 percent and to the European Union by 8.0 percent. Revenues from rubber product exports were up 110 percent to 52 million US dollars, led by rubber tyres and gloves.
June imports were up 31.8 percent to 6.4 billion US dollars.
Consumer goods imports were up 37 percent to 211 million US dollars, led my motor cars and electronic goods following a duty reduction.
Intermediate goods, including oil and textiles were up 30 percent to 665 million US dollars.
Textile and clothing imports, which is the key input for export apparels were up 33 percent to 139 million US dollars. Investment goods imports were up 29.5 percent to 227 million US dollars.
The trade gap for June expanded 48.7 percent to 1.36 billion US dollars.

For the six months to June exports rose 13.7 percent to 3.6 billion US dollars. Tea exports were up 23 percent to 625 million US dollars and industrial exports were up 9.6 percent. But garment exports were down 2.4 percent for the first half to 1.49 billion US dollars.

Imports were up 42.1 percent to 6.6 billion US dollars. Consumer goods were up 43.4 percent to 1.33 billion US dollars, petroleum was up 97 percent to 1.7 billion US dollars and investment goods were up 13 percent to 1.3 billion US dollars.
The trade deficit expanded 108 percent to 2.84 billion US dollars.

The trade account covers a narrow part of the balance of payments.
In addition to exports, the money to buy imports come from remittances sent by expatriate workers, net foreign borrowings by the state and money printed by the central bank and given to the government.
Sri Lanka has a pegged exchange rate and as a result, net capital inflows and remittances can expand the trade deficit without hurting the exchange rate.
The central bank said remittances grew 13.5 percent to 1,820 million US dollars in the first half of the year.
Sri Lanka's external trade slumped last year as growth fell to 3.5 percent. This year the economy is expected to grow 7.0 percent.
Sri Lanka June trade deficit widens 49 pct

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COLOMBO, Sept 1 (Reuters) - Sri Lanka's trade deficit widened 48.7 percent to $416.1 million in June from $279.9 million in the same period last year, the central bank said on Wednesday.
June exports rose 23.4 percent to $697.5 million, compared with $565.2 million a year ago. Imports jumped 31.8 percent to $1.1 billion, compared with $845.1 million a year earlier. (Reporting by Shihar Aneez; Editing by Kim Coghill)