Sri Lanka Imports in August have hit a four-month high and marked the fourth consecutive monthly gain despite restrictions and the forex crisis
As per Central Bank data imports in August amounted to $ 1.48 billion highest since the April figure of $ 1.7 billion.
Imports have also grown month-on-month since May. In July imports were $ 1.28 billion, $ 1.24 billion in June and $ 1.45 billion in May.
However, year-on-year, August imports were down by 12% and CBSL said it was the sixth consecutive month dip year-on-year.
CBSL said in August a decline in expenditure was observed in investment goods and non-food consumer goods, while an increase was recorded in imports of intermediate goods and food and beverages.
Import expenditure on a cumulative basis from January to August amounted to $ 12,801 million, which is a decline of 4.6% (y-o-y).
Considering the need to prioritize essential imports amidst a shortage of forex liquidity, the Government tightened import restriction measures on non-urgent imports during August, which, however, were partially relaxed in September.
“Import expenditure is showing a tendency to increase on a month-on-month basis, since bottoming out in June 2022, which prompted the Government to further tighten import restrictions in August 2022 in order to preserve forex for essential imports, although some of which were relaxed in September 2022,” CBSL said.
Expenditure on the importation of consumer goods declined by 28.7% in August, compared to August 2021, driven by a decline in expenditure on non-food consumer goods despite an increase in expenditure on food and beverages.
The decline in import expenditure on non-food consumer goods was observed in all subcategories, with a notable drop in imports of medical and pharmaceuticals (mainly, vaccines), telecommunication devices (mainly, mobile telephones) and home appliances (mainly, televisions).
In contrast, expenditure on the importation of food and beverages increased by 17.2% in August (y-o-y), with a substantial share of the increase being contributed by the imports of cereals and milling industry products (primarily, rice), and sugar.
However, expenditure on dairy products (mainly, milk powder), seafood (mainly, dried and fresh fish), oils and fats (mainly, coconut oil), vegetables (mainly, big onions) and fruits declined in August, compared to August 2021.
Expenditure on the importation of intermediate goods increased by 2.6% in August, compared to August 2021, mainly driven by fuel, textiles and textile articles (mainly, fabrics) and fertilizer (mainly, urea).
Further, import expenditure on chemical products; diamonds and precious stones and metals (primarily, industrial diamonds); paper and paperboard and articles thereof; and rubber and articles thereof also recorded an increase during August, compared to August 2021.
Meanwhile, many other types of intermediate goods recorded a notable decline, including base metals (mainly, iron and steel), wheat and maize, agricultural inputs (mainly, animal fodder), vehicle and machinery parts, etc.
However, import expenditure on fuel, which consists of crude oil, refined petroleum and coal, increased by 10.2% (y-o-y) to $ 389 million in August, and the increase was attributed to higher average import prices despite lower import volumes of crude oil and refined petroleum. The average import price of crude oil was $ 114.71 per barrel in August, compared to $ 74.88 per barrel in August 2021.
