Sri Lanka's deficit in the cumulative trade balance continued to decline for the sixth consecutive month and the external sector continued to remain stable with increased inflows , the Central Bank said today in its external sector performance review for the month of May.
Reversing the increase recorded for April 2013, the deficit in the trade balance for May 2013 declined by 1.8 percent, year-on-year.
Expenditure on imports decreased by 1.7 percent, year-on-year, in May 2013 while earnings from exports declined by 1.5 percent, due to weak global demand for agricultural goods.
In cumulative terms in the first five months of the year, the trade deficit narrowed by 12.1 percent with a 6.6 percent drop in Export Earnings and a 9.4 percent decline in Import Expenditure.
In January - May of 2013, the country earned US$ 3.85 billion from exports while spending US$.7.58 billion for imports.
Increased earnings from industrial exports, especially from textiles and garments, cushioned the decline in earnings from agricultural products.
Export earnings from garments, which have a share of nearly 40 per cent in total exports, increased by 2.1 per cent in May 2013.
Despite the main agricultural commodity, tea continued to fetch favorable prices in international markets, export earnings from tea declined in May 2013 by 8.3 percent, due to the lower volumes of tea exported. Export earnings from rubber and coconut also declined in May 2013 while earnings from seafood increased.
Fuel imports, which account for nearly a quarter of total import expenditure, declined by 14.1 percent in May 2013.
Earnings from tourism and workers' remittances increased significantly strengthening the Current Account, the Central Bank said.
Tourist arrivals in May 2013 increased by 21.8 percent and earnings from tourism grew at a healthy rate of 34.5 percent to US$ 77.0 million.
Worker remittances grew 6.6 percent in May 2013 to US$ 540.8 million.
Gross official reserves by end May 2013 amounted to US$ 6.6 billion, while total international reserves which include gross official reserves and foreign assets of commercial banks, amounted to US$ 8.2 billion.