Sri Lanka’s trade deficit expand

Sri Lanka's trade deficit expanded to US$ 5.96 billion while the external sector remained buoyant in the first eight months of 2011, the Central Bank reported Monday in its External Sector Performance Review. "The external sector remained buoyant in the first eight months of 2011 reflecting the expanding domestic economic activities, growing external trade, inflows on account of remittances and services and growing investor confidence," the Central Bank said in its review. The trade deficit widened to US$ 885.5 million in August as both earnings from exports and expenditure on imports increased further on a year-on-year basis in August 2011. Although Earnings from exports grew by 28.6 percent in the first six months of the year to US$ 6.97 billion, cumulative expenditure on imports increased by 50.6 percent to US$ 12.93 billion, the figures released by the Economic Research Department of the Central Bank showed. Earnings from exports grew by 19.1 percent in August 2011 to reach US$ 952 million, mainly from the contributions of industrial exports, particularly textiles and garments and rubber products, the Bank reported. Earnings from food, beverages and tobacco exports increased considerably by 51.1 percent in August. Imports of petroleum, machinery and equipment, transport equipment and building materials contributed significantly to the expenditure on imports. During the first eight months, country's workers remitted 27.2 percent more to state coffers amounting to US$ 3.38 billion over the same period of 2010. The Central Bank said the country's total external reserves, which includes gross official reserves and foreign assets of commercial banks, increased to US$ 9.29 billion by end of August 2011.