Sri Lanka’s trade deficit widened for the fifth consecutive month in July 2021 although earnings from export of goods increased during the month over a year earlier.
This was revealed through the Central Bank’s External Sector performance report for July 2021.
The cumulative deficit in the trading account from January to July 2021 widened to 4,922 million US dollars from 3,471 million US dollars in the corresponding period of 2020.
According to the report, workers’ remittances declined in July, following the trend observed in June 2021, while earnings from tourism remained at minimal levels.
The reports notes, exports performed well in July 2021 despite the ongoing pandemic. Earnings from merchandise exports in July 2021 recorded an increase of 1.7 percent to US dollars 1,104 million compared to July 2020 while earnings from the export of industrial goods increased by 1.1 percent in July 2021 compared to July 2020.
Total earnings from the export of agricultural goods in July 2021 increased by 2.3 percent compared to July 2020. However, earnings from the export of tea declined significantly, due to a decline in both volume and prices of tea exported.
Shedding light on imports, the report says expenditure on merchandise imports increased by 32.2 percent to 1,710 million US dollars compared to 1,294 million US dollars recorded in July 2020.
On a cumulative basis, total import expenditure from January to July 2021 amounted to 11,725
million US dollars, compared to 8,968 million US dollars recorded in the corresponding period in 2020.
Gross official reserves stood at US dollars 2.8 billion at the end of July 2021.