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Trade account narrows to USD 390 Mn in Nov. 2023

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The trade deficit narrowed in November 2023, compared to a year earlier and October 2023, as a combined impact of an improvement in exports and a compression in imports. Exports recorded a year-on-year growth for the first time since September 2022.

The deficit in the merchandise trade account narrowed to USD 390 million in November 2023, compared to the deficit of US dollars 449 million recorded in November 2022 as well as US dollars 683 million recorded in October 2023.

In the meantime, the cumulative deficit in the trade account from January to November 2023 narrowed to USD 4,414 million from USD 4,827 million recorded over the same period in 2022. Foreign investments in the government securities market continued to record a net outflow since July 2023 but remained positive on a cumulative basis during the year. Earnings from merchandise exports recorded a year-on-year marginal increase in November 2023 for the first time since September 2022.

Earnings from the exports of industrial goods declined in November 2023, with a significant share of the decline being contributed by garments. Earnings from mineral exports increased substantially in November 2023, compared to November 2022, mainly due to higher exports of zirconium ores. Earnings from the exports of agricultural goods improved in November 2023, compared to a year ago, led by tea (mainly, instant tea) exports.

Expenditure on merchandise imports declined by 3.9 % (year-on-year) to USD 1,389 million in November 2023, compared to USD 1,445 million in November 2022 and US dollars 1,610 million in October 2023. A decline in import expenditure was observed in intermediate goods, mainly resulting from lower expenditure on fuel imports.

Expenditure on the importation of consumer goods increased in November 2023, compared to a year ago, mainly due to the increase in expenditure on non-food consumer goods. The increase in expenditure on non-food consumer goods was broad-based, with a notable increase in imports of medical and pharmaceuticals (primarily, medicaments), telecommunication devices (primarily, mobile phones), home appliances (primarily, televisions), and household and furniture items.

Foreign investments in the government securities market recorded a notable net outflow of USD 73 million in November 2023.

Foreign remittances record USD 500 Mn, Reserves up to USD 3.6 Bn. in Nov.

Monthly workers’ remittances continued to exceed USD 537 million and recorded a notable increase in November 2023, in comparison to USD 517 million in October 2023 and USD 384 million in November 2022.

Meanwhile, based on the provisional data, total departures for foreign employment in November 2023 and from January to November 2023 amounted to 25,133 and 274,562, respectively, in comparison to the total departures of 311,056 recorded in 2022. While tourist arrivals pass the 1.5 million mark for 2023, earnings from tourism in November 2023 were estimated at USD 205 million, in comparison to the estimates of US dollars 137 million in the previous month and US dollars 81 million in November 2022. Consequently, earnings from tourism from January to November 2023 amounted to USD 1,799 million, compared to USD 1,009 million in the corresponding period in 2022. Gross official reserves were estimated at USD 3.6 billion by the end of November 2023. This included the swap facility from the People’s Bank of China equivalent to around USD 1.4 billion which is subject to conditionalities on usability. The Central Bank absorbed USD 117 million from the domestic foreign exchange market, on a net basis, during November 2023. Overall, the Central Bank has purchased around USD 1.8 billion, on a net basis, from January to November 2023.

The Sri Lanka rupee continued to remain stable against the US dollar during November 2023.

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