Sunday, September 24, 2023

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SL trade deficit narrows to US dollars 583 million in April 2023

By: Staff Writer

Colombo (LNW): The trade deficit continued to remain modest but it narrowed in April 2023, compared to a year ago, though it recorded a month-on month increase for the third consecutive month.

The deficit in the merchandise trade account narrowed to US dollars 583 million in April 2023, from dollars 728 million recorded in April 2022 due to a larger decline in imports, compared to the decline in exports.

However, the trade deficit showed an increasing trend on a monthly basis since January 2023. The cumulative deficit in the trade account during January to April 2023 was US dollars 1,444 million, a sizeable decline from US dollars 3,125 million recorded over the same period in 2022.

Earnings from merchandise exports declined by 12.6 per cent in April 2023, over April 2022, to US dollars 849 million, recording the lowest earnings since April 2021.

The decline in earnings from industrial exports, including garments, associated with slowing external demand mainly contributed to this contraction in export earnings in April 2023, compared to a year earlier.

Meanwhile, export earnings have declined month-on-month basis due to a broad-based decline in earnings from most of the major export categories, partly driven by low activities during the April holiday season.

Cumulative export earnings during January to April 2023 recorded at US dollars 3,846 million, a decline of 9.0 per cent over the same period in the last year

Expenditure on merchandise imports declined by 15.8 per cent to US dollars 1,431 million in April 2023, compared to US dollars 1,699 million in April 2022.

A decline in expenditure was observed in imports of intermediate goods and investment goods, while an increase was recorded in imports of consumer goods. However, there is an increase in the import expenditure in general since March 2023.

Meanwhile, cumulative import expenditure during January to April 2023 declined by 28.0 per cent over the corresponding period in 2022.

Expenditure on the importation of consumer goods increased in April 2023, compared to a year ago, led by higher expenditure on non-food consumer goods although food and beverages imports recorded a decline.

Expenditure on non-food consumer goods increased due to higher medical and pharmaceuticals (mainly, medicaments), while most of other subcategories declined, compared to April 2022.

Meanwhile, the decline in expenditure on food and beverages was broad-based, but the drop in imports of cereals and milling industry products (primarily, rice) and dairy products (primarily, milk powder) was notable.

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