Merchandise trade deficit expands in Jan. 2024

The merchandise trade deficit recorded an expansion in January 2024, mainly due to higher import expenditure.With regard to services trade, notable inflows were observed in January 2024 into sea transport, air transport, and computer and IT/BPO related services compared to January 2023. Meanwhile, major outflows were recorded in the form of air transport, sea transport, and management and consulting services.

Workers’ remittances recorded an improvement in January 2024, compared to the corresponding period of the previous year.

Earnings from tourism recorded the highest monthly value in January 2024 since January 2020.Foreign investments in the government securities market recorded a net outflow in January 2024.

Gross Official Reserves continued to improve to US dollars 4.5 billion by end January 2024 and the Sri Lanka rupee recorded an appreciation of 4.4 per cent during the year up to 29 February 2024.

The deficit in the merchandise trade account widened to US dollars 541 million in January 2024 from US dollars 445 million recorded in January 2023, mainly with higher increase in imports. In addition, trade deficit in January 2024 widened compared to the deficit of US dollars 487 million in December 2023.

Earnings from merchandise exports recorded a marginal decline of 0.8 per cent to US dollars 971 million in January 2024 compared to US dollars 978 million in January 2023. A decline in earnings was observed in industrial exports and mineral exports, while agricultural exports increased in January 2024. The decline in industrial goods exports in January 2024 compared to January 2023 was mainly contributed by garments, resulting from lower exports of garments to most major markets.

However, earnings from petroleum products increased due to the increase in volumes of bunkering and aviation fuel exports. Earnings from the exports of agricultural goods improved in January 2024, compared to a year ago, mainly contributed by minor agricultural products, coconut related products, and tea. Meanwhile, earnings from mineral exports declined due to the base effect of higher exports of zirconium ores in January 2023.

( CBSL)