(LANKAPUVATH | COLOMBO) – The trade deficit in May 2023 widened, compared to a year ago, for the first time since February 2022 while the cumulative trade deficit remained modest so far during 2023, the Central Bank of Sri Lanka reported on Thursday releasing the External Sector Performance Review for May 2023.
The deficit in the merchandise trade account amounted to US$ 447 million in May 2023, from US$ 403 million recorded in May 2022.
The cumulative deficit in the trade account during January to May 2023 was US$ 1.926 billion, a sizeable decline from US$ 3.528 billion recorded over the same period in 2022.
Earnings from merchandise exports declined by 2.7 percent in May 2023, over May 2022, to US$ 1.019 billion, while increasing notably compared to April 2023.
The decline in earnings from industrial exports mainly contributed to the decline in export earnings amidst improved agricultural exports.
Meanwhile, cumulative export earnings during January to May 2023 recorded at US$ 4.866 billion, a decline of 7.7 percent over the same period in the last year.
Earnings from the exports of industrial goods declined 7.5 percent in May 2023, compared to May 2022, mainly due to the decline in the exports of garments by 14.2 percent.
Earnings from the exports of agricultural goods increased by 18.2 percent in May 2023, compared to a year ago, with a substantial share of increase being contributed by tea.
Expenditure on merchandise imports increased marginally to US$ 1.466 billion in May 2023, compared to US$ 1.451 billion in May 2022, recording the first year-on-year increase since February 2022
Meanwhile, cumulative import expenditure during January to May 2023 declined by 22.8 percent to US$ 6.8 billion from US$ 8.8 billion in May 2022.
Workers’ remittances increased notably to US$ 480 million during May 2023 in comparison to US$ 304 million in May 2022 and US$ 454 million in April 2023.
Earnings from tourism in May 2023 were estimated at US$ 131 million, in comparison to US$ 167 million in the previous month and US$ 44 million in the corresponding month in the previous year.
Earnings from tourism during January to May 2023 amounted to US$ 828 million, compared to US$ 635 million in comparable period in 2022.
Foreign investments in the government securities market recorded a notable net inflow of US$ 106 million in May 2023, while cumulative net inflow during January to May 2023 amounted to US$ 358 million.
Exchange rate recorded a notable appreciation during the month of May 2023. Accordingly, during the year up to 28 June 2023, the Sri Lanka rupee appreciated by 17.6 percent against the US dollar.
Gross official reserves recorded a notable increase by end May 2023 at around US$ 3.5 billion, compared to US$ 2.8 billion as at end April 2023.
This increase was mainly due to the receipt of US$ 350 million from the ADB as well as significant net purchases from the domestic foreign exchange market by the Central Bank during the month.
Exchange rate recorded a notable appreciation during the month of May 2023. Accordingly, during the year up to 28 June 2023, the Sri Lanka rupee appreciated by 17.6 percent against the US dollar.
