The trade deficit widened in September 2019 (year-on-year), with the decline in earnings from exports exceeding the decline in expenditure on imports.
Nevertheless, the trade deficit remained significantly low in the first nine months of 2019 over the same period of last year, as a result of increased cumulative earnings from exports and a sharp decline in cumulative expenditure on imports. Meanwhile, the drop in tourist arrivals was contained further in September 2019.
Workers’ remittances rose (year-on-year) in September 2019, although declining on a cumulative basis. In the financial account, foreign investment in the CSE and the government securities market recorded net outflows in September 2019. Despite some depreciation pressure in the month of September, the Sri Lankan rupee remained appreciated against most major currencies during the first nine months of the year.
The deficit in the trade account widened in September 2019 to US dollars 758 million, in comparison to US dollars 713 million in September 2018. However, on a cumulative basis, the trade deficit contracted by US dollars 2,341 million to US dollars 5,613 million during the first nine months of 2019, in comparison to US dollars 7,953 million in the corresponding period of 2018.
Meanwhile, the terms of trade, which represent the relative price of imports in terms of exports, deteriorated by 2.5 per cent (year-on-year) as export prices reduced at a faster pace than the reduction in import prices. In cumulative terms, the terms of trade deteriorated by 0.4 per cent during the first nine months of 2019 in comparison to the corresponding period of 2018.
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