Wednesday, 19 February 2020 06:52

Sri Lanka’s trade deficit widens with low export earnings

Earnings from exports declined while expenditure on imports increased during December 2019, widening the trade deficit. During the year 2019, the trade deficit contracted significantly, driven by a sharp contraction in import expenditure, Central Bank announed

The deficit in the trade account widened in December 2019 to US dollars 784 million, from US dollars 701 million in December 2018, led by a decline in exports and a growth in imports on a year-on-year basis.

However, on a cumulative basis, the trade deficit contracted by US dollars 2,346 million to US dollars 7,997 million during 2019 from US dollars 10,343 million in 2018.

Meanwhile, the terms of trade, i.e., the ratio of the price of exports to the price of imports, deteriorated by 2.9 per cent (year-on-year) in December 2019, as export prices declined at a faster pace than the decline in import prices,CB data showed.

Cumulatively the terms of trade deteriorated by 1.5 per cent during 2019 in comparison to 2018.

In comparison to December 2018, earnings from merchandise exports declined by 3.2 per cent to US dollars 1,000 million in December 2019, with the decline in agricultural exports as well as industrial exports.

Earnings from agricultural exports declined in December 2019 due to lower exports of most subcategories.

On a year-on-year basis, earnings from tea exports declined due to the combined effect of lower export volumes and average export prices.

Earnings from spices declined due to lower export prices of all sub sectors while export volumes, except cloves, also declined. Earnings from seafood exports also declined with lower demand from the US market.

(LI)

Latest Business News

Image
There are 31407 listings and 942 categories in our website