Sri Lanka's trade deficit in February showcased contrasting trends, with a widening year-on-year gap but a significant narrowing from the previous month, reflecting the nation's economic journey towards normalization.
The Balance of Payment (BoP) recorded a negative trade balance of US$ 319 million for February, nearly ten times higher than the US$ 39 million deficit noted a year earlier.
This increase was primarily attributed to heightened imports, which totaled US$ 1,378 million, and exports valued at US$ 1,059 million.
The surge in imports, a sign of the economy's gradual rebound, was accompanied by a substantial rise in merchandise imports, up by 35.0 percent year-on-year. Conversely, exports saw a more moderate increase of 7.9 percent, reflecting the normalization of economic conditions with eased import restrictions and a relaxed monetary policy.
Despite the overall deficit, February saw a notable improvement from January's figures, where the deficit stood at US$ 541 million. This positive shift was attributed to strengthened export performance and reduced spending on fuel imports due to lower demand.
The Central Bank highlighted that export growth was broad-based, spanning across industrial, agricultural, and mineral sectors. Particularly noteworthy were the robust earnings from petroleum products, fueled by increased volumes of bunkering and aviation fuel exports.
Additionally, the agricultural sector saw strong tea earnings driven by higher volumes and prices.
Moreover, the garments and textiles industry witnessed a promising uptick in earnings compared to January, signaling a positive trajectory for the sector. Import dynamics also reflected a similar trend, with consumer, intermediate, and investment goods driving the increase. Consumer goods, in particular, experienced a surge as the economy normalized, with notable rises in both food and beverage imports and non-food consumer goods.
Fuel imports notably decreased in February, dropping to US$ 290.5 million from US$ 417.5 million in January, aligning with reduced demand and economic normalization efforts.
Overall, the February trade data underscores Sri Lanka's ongoing economic transition and the resilience displayed amidst global challenges.
