Trade deficit declined in February
Earnings from exports declined by 2.9 percent, year-on-year, to $ 798
million in February 2013, as earnings from agricultural exports and
industrial exports declined.
Earnings from exports of agricultural commodities declined mainly as
a result of lower earnings from rubber and coconut exports.
Lower export earnings from several items including diamonds,
jewellery, petroleum products, rubber products and animal fodder
resulted in earnings from industrial exports declining.
Nevertheless, earnings from exports of garments and textiles, which
have a significant share of around 40 percent in total exports,
increased on an year-on-year basis, by 8.8 percent, in February 2013.
Among agricultural exports, earnings from exports of spices, which have
continued to exhibit an increasingtrend since May last year, also
recorded a further increase on a year-on-year basis, in February
2013.Expenditure on imports declined by 9.3 percent, year-on-year, to $
1,433 million in February 2013. Lower expenditure on imports of refined
petroleum products, transport equipment, wheat, vehicles and dairy
products have made a significant contribution towards the decline in
import expenditure in February 2013.
However, expenditure on imports of intermediate goods such as
textiles and textile articles, gold, mineral products, diamonds and
precious and semi-precious stones increased on a year-on-year basis in
February 2013. Imports of textiles and textile articles grew by 18.3
percent, year-on-year, in value terms, indicating higher potential
earnings from exports of apparel products in the coming months.
Import expenditure on investment goods meanwhile declined on a
year-on-year basis in February 2013, as imports of transport equipment
declined. However, import expenditure on building materials and
machinery and equipment categorised under investment goods, increased in
February 2013. With respect to consumer goods imports, expenditure on
import of food and beverages and non-food consumer goods declined.
Vehicle imports, which declined by 41.4 percent, year-on-year, made the
largest contribution towards the decline in expenditure on consumer
Following these developments in relation to exports and imports in
February 2013, the trade deficit for the first two months of 2013
declined by 20.3 percent, year-on-year to $ 1,424 million. The
multi-pronged policy strategy implemented during the first half of 2012
to curb the widening trade deficit has therefore continued to help
reduce the deficit in the current account.
Tourist arrivals in February 2013 increased by 11.6 percent,
year-on-year, to 93,232 while earnings from tourism grew at a healthy
rate of 20.7 percent, year-on-year, to $ 103 million. Recording a
year-on-year growth of 4.2 of per cent, workers’ remittances amounted to
$ 490 million in February 2013. In comparison, workers’ remittances
amounted to $ 470 million in February 2012.
In February 2013, net inflow to the Colombo Stock Exchange (CSE)
amounted to $ 8.7 million compared to the net inflow of $ 16.3 million
recorded in February 2012. Meanwhile, there have been substantial
inflows of foreign investments to the Government securities market.
Net inflows to Treasury Bills and Treasury Bonds amounted to $ 212
million during February 2013 compared to a net inflow of $ 229 million
in February 2012. On a cumulative basis net inflows to Treasury Bills
and Treasury Bonds amounted to $ 501 million by end February 2013,
compared to $ 400 million in the corresponding period in 2012. Further,
in February 2013, long-term loans obtained by the government amounted to
$ 132 million, while long-term loan inflows to the government on a
cumulative basis amounted to $ 278 million by end February 2013,
compared to $ 240 million by end February 2012.