(UTV|COLOMBO) – External performance in December brought a mixed ending to 2017 with exports surpassing USD1 billion for the fifth time buoyed by apparel which topped $5 billion and aggressive growth of 42% in seafood, the Central Bank said, but a year-end run on imports pushed the trade deficit to over $1 billion for the first time since 2012.
External sector performance continued to improve in December 2017, mainly with higher inflows to the Financial Account of the Balance of Payments (BOP). Although earnings from exports increased at a higher rate, the increase in import expenditure resulted in widening the trade deficit in December 2017, the Central Bank said in its latest report.
“Continued inflows by way of tourist earnings and workers’ remittances, however, have contributed in curtailing the expanded trade deficit to a certain extent. Improvement in short-term and long-term capital inflows continued during the month.
Reflecting the favourable developments in the external sector, the BOP recorded a surplus of $2,068 million in 2017, while gross official reserves of the country stood at $8 billion as at end 2017. Meanwhile, the Sri Lankan rupee depreciated by 2% during 2017,” it said. The deficit in the trade account expanded in December 2017, exceeding the $1 billion mark for the first time since November 2012.
The cumulative trade deficit also increased during 2017, reflecting higher import expenditure caused by weather-related factors, offsetting the notable increase in export earnings.
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