Exports increased more than imports (y-o-y), reducing the trade deficit in April 2024. The deficit in the merchandise trade account narrowed to US dollars 558 million in April 2024 from US dollars 583 million recorded in April 2023.
Earnings from merchandise exports increased by 3.4% to US dollars 878 million in April 2024 compared to US dollars 849 million in April 2023. There was an increase in earnings across all major categories of exports, where industrial exports increased the most, despite a decline in garments exports.
Meanwhile, the cumulative deficit in the trade account during January to April 2024 widened to US dollars 1,777 million from US dollars 1,479 million recorded over the same period in 2023. Expenditure on merchandise imports recorded a marginal increase of 0.3 per cent to US dollars 1,435 million in April 2024 compared to US dollars 1,431 million in April 2023.
Computer & IT/BPO related services were the major contributors to the increase in inflows to the rest of the services sector in April 2024. The major outflows from the services sector in April 2024 were recorded mainly in relation to air transport, sea transport, travel abroad and technical, trade-related, and other business services. Total services sector outflows were estimated at US dollars 188 million in April 2024, in comparison to US dollars 139 million in April 2023. Foreign investments in the government securities market recorded a net outflow of USD 24 million in April 2024, resulting in a cumulative net outflow of US dollars 113 million during January to April 2024. Meanwhile, foreign flows to the CSE, including both primary and secondary market transactions, recorded a marginal net inflow in April 2024 and a cumulative net inflow of US dollars 23 million during January-April 2024.
The Sri Lanka rupee appreciated by 7.3 % against the US dollar during the year up to May 31, 2024.
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Gross Official Reserves reach USD 5.5 Bn, workers’ remittances up to USD 544 Mn
Sri Lanka’s Gross Official Reserves (GOR) maintained the upward trend and stood at US$ 5.5 billion at end April 2024, recording over US$ 1 billion increase from end 2023.
The increase in the GOR was mainly due to the substantial net purchases of foreign exchange from the domestic foreign exchange market by the Central Bank. Net intervention in April 2024 amounted to US dollars 420 million (based on trade date), while the net purchases during the first four months of 2024 amounted to US dollars 1.6 billion. Meanwhile, import coverage of GOR (including the PBOC swap), which remained above 3 months of imports since December 2023, amounted to 3.8 months of imports as at end April 2024.
Workers’ remittances continued to contribute notably to the external current account and forex market liquidity. The remittances which were USD 1,867.2 million from 2023 January to April increased by 11.4% to USD2,079.9 million during the corresponding period in 2024.
Workers’ remittances amounted to US dollars 544 million in April 2024, in comparison to US dollars 454 million in April 2023
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