Sri Lanka’s expenditure on imports has declined, year-on-year, for the second consecutive month in April as curb measures by the Central Bank kicked in whilst higher exports helped cut the trade deficit.Imports in April amounted to US$ 1.699 billion down by 0.5%. However, April data reflects a sharper dip in comparison to $ 1.8 billion spent in March. For the first four months it was higher by 8.9% to $ 7.35 billion.
CB also said the trade deficit recorded a month-on-month decline for the fourth consecutive month in April 2022, supported by the policy measures that were aimed at discouraging non-urgent imports as well as higher growth in exports.
It said a decline in expenditure was observed in import of non-food consumer goods and investment goods, while an increase was recorded in import of food and intermediate goods.
The restrictions imposed by the Government on the importation of non-urgent goods and the impact of large depreciation of the exchange rate may have contributed to this decline.
Expenditure on the importation of consumer goods declined by 15.4% in April, compared to April 2021, due to the 43.4% reduction in non-food consumer goods imports.
This decline in expenditure on non-food consumer goods was broad-based, but the drop-in imports of telecommunication devices (mainly, mobile phones), home appliances (mainly, televisions), and medical and pharmaceuticals (mainly, medicaments) was notable. However, a slight increase in expenditure was recorded in clothing and accessories.
Meanwhile, the food and beverages import expenditure increased by 19.8%, led by the increase in the expenditure on milled rice imports.
Further, a sizable increase was also observed in the import expenditure of dairy products (mainly, milk powder), and vegetables (mainly, garlic and chickpeas).
Expenditure on the importation of beverages also increased to some extent (alcoholic and other beverages).
However, the import expenditure on sugar declined by 35.6% YoY in April 2022, along with oils and fats, fruits, seafood, and spices.
Intermediate goods: Expenditure on the importation of intermediate goods increased by 11.3% in April 2022, compared to a year ago, driven by imports of fuel and textile and articles.
Despite the non-importation of crude oil, the expenditure on fuel (that includes refined petroleum and coal) increased by 23.5% YoY, recording at $ 510 million due to higher average import prices.
The categories of intermediate goods that recorded an increase include agricultural inputs (mainly, animal fodder), chemical products (mainly, essential oils), plastics and articles thereof (mainly, ethylene polymers, and plastic plates and sheets), food preparations (mainly, malt extract and liquid margarine), paper and paperboard and articles thereof, mineral products, diamonds, precious stones and metals, and unmanufactured tobacco.