The merchandise trade deficit widened in August 2023 compared to a year ago led by higher decline in export earnings than the decline in import expenditure.
The deficit in the merchandise trade account widened in August to US dollars 307 million compared to US dollars 260 million recorded in August 2022.
However, the cumulative deficit in the trade account during January to August 2023 narrowed to US dollars 2,964 million from US dollars 3,889 million recorded over the same period in 2022 due to a larger decline in imports offsetting the decline in exports.
- Export & Import earnings –
Both export earnings and import expenditure have increased in August 2023 compared to July 2023.
Earnings from exports in August 2023 marked the highest monthly earnings so far in 2023. However, earnings from merchandise exports declined by 8.7 per cent in August 2023, year- on-year, to US dollars 1,119 million. Cumulative export earnings during January to August 2023 also declined by 10.1 per cent over the same period in the last year, amounting to US dollars 8,010 million.
Expenditure on merchandise imports declined by 4.0 per cent (year-on-year) to US dollars 1,426 million in August 2023. However, a marginal increase in import expenditure is observed from June 2023 onwards, on a month-on-month basis, partly supported by the relaxations of import restrictions. Cumulative import expenditure during January to August 2023 declined by 14.3 per cent to US dollars 10,974 million, compared to the same period in the previous year.
- Workers’ remittances –
Workers’ remittances recorded notable improvement in August 2023 compared to the previous year.
Workers’ remittances amounted to US dollars 499 million in August 2023 in comparison to US dollars 325 million in August 2022 and US dollars 541 million in July 2023.
Based on the provisional data, total departures for foreign employment in August 2023 and during January to August 2023 amounted to 26,131 and 197,146, respectively, in comparison to the total departures of 311,056 recorded in 2022.
- Earnings from tourism –
Tourist arrivals declined to 136,405 in August 2023, compared to 143,039 arrivals recorded in July 2023, reflecting seasonal patterns observed annually.
However, the cumulative tourist arrivals improved notably during January to August 2023 and amounted to 904,318, compared to 496,430 arrivals recorded during the corresponding period in 2022.
Earnings from tourism in August 2023 were estimated at US dollars 211 million, in comparison to the estimates of US dollars 219 million in the previous month and US dollars 68 million in the corresponding month in 2022. Consequently, earnings from tourism during January to August 2023 amounted to US dollars 1,304 million, compared to US dollars 833 million in the corresponding period in 2022.
- Gross Official Reserves –
Gross Official Reserves were estimated at US dollars 3.6 billion by end August 2023.
This included the swap facility from the People’s Bank of China, equivalent to around US dollars 1.35 billion, which is subject to conditionalities on usability.
The Central Bank supplied US dollars 171 million to the domestic foreign exchange market on net basis during the month. Overall, the Central Bank has purchased around US dollars 1.5 billion, on net basis, during January to August 2023.
Full report: https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/press/pr/press_20231002_external_sector_performance_August_2023_e.pdf (NewsWire)