Sri Lanka's cumulative trade deficit widens over US $ 4 billion

Sri Lanka's cumulative trade deficit widened over US$ 4 billion during the first ten months of 2010 due to increased expenditure on imports, figures released Wednesday by Economic Research Department of Sri Lanka's Central Bank showed

Earnings from exports during the first ten months of 2010 increased by 13.2 per cent, to US$ 6.505 billion while cumulative expenditure on imports had increased by 32.8 per cent to US$ 10.863 billion expanding the trade deficit to US$ 4.357 billion.

In the corresponding period of 2009 the gap in trade stood at US$ 2.431 billion.

The monetary authority has attributed the widened trade gap to substantial increases in imports of non food consumer goods.

Despite losing the GSP+ tariff facility from the European Union in August this year, the earnings from garment exports to the EU and USA in October 2010 have increased by 27.4 percent and 33.1 percent, respectively.

Earnings from textile and garments, rubber products and machinery and equipment as well as from agricultural crops of tea and rubber contributed the most to the growth in exports in October, 2010.

Expenditure on imports of consumer goods rose in October, 2010 due to higher imports of non-food consumer goods, led by motor vehicles, the Central Bank noted.

During the first ten months of 2010, workers have remitted US$ 3.38 billion, an increase of 21.9 percent over that of the corresponding period of 2009.

The gross official reserves continued to remain significantly above the targeted level and stood at US$ 6.6 billion, an amount equivalent to 6.1 months of imports without Asian Clearing Union (ACU) funds by end of November, 2010, the Central Bank reported.