Sri Lanka trade deficit widens

Sri Lanka’s trade deficit widened in June driven by rising import of intermediate goods and a decline in remittances, the Central Bank of Sri Lanka (CBSL) said on Saturday.

The CBSL’s external sector performance report for June showed that merchandise exports and imports rose 12.6 per cent and 57.2 per cent, respectively, year-on-year in the month, reports Xinhua news agency.

The country’s trade deficit stood at $652 million, up from $161 million in the same month last year.

Data showed that intermediate goods like fuel, textiles and textile garments, chemical products, and base metals were major contributing factors to increased imports.

Investment goods categorised as machinery and equipment rose 81 per cent year on year.

Meanwhile, the country’s export volumes in June surpassed pre-pandemic levels, with revenue from industrial exports growing 17 per cent year-on-year.

However, workers remittances declined 16 per cent in the month of June.

Sri Lanka’s gross official reserves stood at $4.1 billion at the end of June, enough to cover 2.6 months of imports.

The country repaid a $1 billion sovereign bond in July.