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SL trade deficit declines for the fifth consecutive month in May

The trade deficit recorded a decline for the fifth consecutive month on month-on-month basis and for the third consecutive month on a year-on-year basis in May 2022, supported mainly by the policy induced moderation of imports, along with the notable growth momentum of exports, Central Bank announced .

The trade deficit narrowed to US dollars 404 million in May 2022, compared to the deficit of US dollars 716 million recorded in May 2021.

On a cumulative basis, trade deficit narrowed on a year-on-year basis for the first time in May during this year. Accordingly, the trade deficit during January-May 2022 narrowed to US dollars 3,535 million, from US dollars 3,663 million recorded over the same period in 2021.

Expenditure on merchandise imports declined to the lowest level since November 2020, recording a decline of 9.7 per cent in May 2022 to US dollars 1,451 million, compared to US dollars 1,607 million and US dollars 1,699 million recorded in May 2021 and April 2022, respectively.

Earnings from merchandise exports in May 2022 increased substantially by 17.5 per cent over the corresponding month in 2021, recording at US dollars 1,047 million.

The cumulative export earnings during January-May 2022 increased by 12.2 per cent over the same period in the last year, amounting to US dollars 5,266 million.

Expenditure on the importation of consumer goods in May 2022 declined by 30.2%, compared to May 2021, contributed mainly by a reduction of 11.4% in food and beverages and of 47.4% in non-food consumer goods.

However, expenditure on cereals and milling industry products (mainly, rice and wheat flour) and beverages in May 2022 remained high, compared to May 2021.

The decline in the imports of non-food consumer goods was driven by telecommunication devices (mainly, mobile telephones), home appliances (mainly, televisions and fans) and medical and pharmaceuticals (mainly, vitamins and vaccines), rubber products (mainly, rubber tyres) and household and furniture items.

Expenditure on the importation of intermediate goods marginally decreased by 0.9% in May 2022, compared to a year ago, mainly driven by a 79.8% decline in the expenditure on base metals (primarily, iron and steel).

Further, many types of intermediate goods, including chemical products, plastics and articles thereof, fertiliser, vehicle and machinery parts, mineral products, etc., showed a decline.

Total earnings from the exports of agricultural goods in May 2022 declined by 4.2%, compared to May 2021. This decline was mainly attributed to exports of tea, spices, unmanufactured tobacco and vegetables.

Earnings from mineral exports in May 2022 declined by 58.4%, compared to May 2021, mainly due to a decline in export earnings from titanium ores categorised under ores, slag and ash.

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