November 04, 2020 (LBO) – The Central Bank of Sri Lanka reports that the trade account deficit contracted by over US $ 1 billion in the eight months ending August 2020 compared to the corresponding period of 2019.
Both exports and imports contracted from January to August 2020 compared to the same period in 2019, but the decline in the trade deficit results from the contraction in imports outpacing the contraction in exports.
The decrease in import expenditure was US $ 2,628 million while the decline in export earnings was US $ 1,585 million between the said periods.
As a result, the trade deficit contracted to US $ 3,812 million during the period under review from US $ 4,855 million recorded in the corresponding period of 2019.
Merchandise export revenues have returned to pre-pandemic levels from the sharp decline observed in April 2020. Cumulative export revenues during the period January to August 2020 recorded a reduction of 19.7%. % to 6,445 million US dollars against 8,030 US dollars. million for the corresponding period of 2019.
This reduction is due to disruptions in the domestic production of trade-related goods and services during the lockdown and disruptions in demand and domestic and global supply chains due to the COVID-19 pandemic.
Industrial export revenues, which accounted for about 76% of total exports, declined 22.5% year-on-year to US $ 4,905 million in the eight months ending August 2020. Export revenues of textiles and clothing mainly contributed to this situation. decrease, with a decrease of 23.6% to 2,853 million US dollars.
Spending on importing intermediate goods, which accounted for around 55% of total imports, declined in the eight months ending August 2020, with lower spending recorded in most subcategories.
As a result, expenditure on intermediate goods decreased by 22.9%, year on year, to US $ 5,692 million during the period under review.
Fuel import spending fell 34.4% to US $ 1,691 million from January to August 2020, due to lower import spending on crude oil and refined petroleum with lower prices which prevailed in the international market and lower import volumes.