By: Staff Writer
Colombo (LNW): As per the latest data from the Central Bank, cumulative export earnings during January to June 2023 registered a 10% decrease year-on-year (YoY) to $5.87 billion, whilst import expenditure during the same period saw a substantial decline of 18.6% YoY to $ 8.16 billion.
It also noted the deficit in the trade account from January to June 2023 narrowed to $ 2.89 billion, a considerable improvement from the $ 3.5 billion recorded during the same period in 2022.
As the country continues its journey towards economic recovery, maintaining this positive trend and addressing structural vulnerabilities will be crucial in ensuring long-term economic stability. Thus, the narrowing trade deficit showcases some progress in managing trade imbalances.
In June, earnings from exports declined by 19.5% YoY to just over $ 1 billion. The Central Bank noted that this decline mainly reflected the high base in June 2022, and all major subcategories of merchandise exports recorded a decline in June 2023 compared to year earlier.
However, in contrast, expenditure on imports increased by 11.6% $ 1.36 billion in June 2023, compared to $ 1.22 billion in June 2022. The Central Bank said the increase in import expenditure was observed across all main categories of imports, which was supported by the significantly low base in June 2022.
Detailing the imports, it said the biggest intermediate goods category of imports in June saw a rise of 7.3% YoY to $ 875.4 million, which also includes fuel bills rising by 45% YoY to $ 290 million and investment goods marginally increasing by 2.5% YoY to $ 239.9 million and consumer goods imports increased significantly by 42.6% YoY to $ 251.7 million.
The Central Bank said the relaxation of import restrictions, commenced during June and July 2023, could gradually generate higher import expenditure in the period ahead.
Expenditure on the importation of consumer goods increased in June 2023, compared to a year ago, driven by the increases in expenditure on both food and non-food consumer goods. Expenditure on food and beverages increased due to the increase in import volumes of sugar; oils and fats (primarily, coconut oil); and vegetables (primarily, lentils).
A sizeable increase in expenditure on non-food consumer goods was due to the imports of medical and pharmaceuticals (mainly, medicaments), telecommunication devices (mainly, mobile telephones), and cosmetics and toiletries.
Expenditure on the importation of intermediate goods also increased in June 2023, mainly driven by the imports of fuel and base metals (mainly, iron and non-alloy steel). Import volumes of crude oil and refined petroleum increased in June YoY, although coal imports remained limited due to the off-season.
