Sri Lanka’s external sector remains stable with contracting trade deficit

Sri Lanka’s external sector remains stable with contracting trade deficit

19 June 2019 04:30 pm

Sri Lanka’s external sector remained relatively stable in April 2019 supported by a contracting trade deficit, Central Bank announced recently.

In April 2019, the deficit in the trade account narrowed to US dollars 797 million from US dollars 999 million in April 2018.

The considerable reduction in the trade deficit in April 2019 was due to the decline in import expenditure by 11 per cent (year-on-year) and a marginal increase of export earnings by 0.4 per cent (year-on-year).

Earnings from tourism in April recorded a decline of 7.5 per cent (year-on-year), reflecting partly the impact of Easter Sunday attacks.

With the decline in tourist arrivals in April, the growth in earnings from tourism moderated to 2.2 per cent in the first four months of 2019 over the corresponding period of 2018.

Workers’ remittances amounted to US dollars 554 million in April 2019, recording a growth of 2.3 per cent (year-on-year).

On a cumulative basis, workers’ remittances amounted to US dollars 2,171 million during the first four months of 2019.

After a brief spell of volatility in the third week of April 2019, the exchange rate remained stable during the latter part of April 2019.

The country’s gross official reserves stood at US dollars 7.2 billion, which was equivalent to 4.1 months of imports at end April 2019, Central Bank revealed.