Export earnings up, imports too up in August

Export earning in August 2006 grew significantly by 25.6 per cent to US$ 734 million reaching the highest ever value recorded in a single month, but imports also rose in the same month, the Central Bank said. Part of this high export growth may be attributed to the spillover of stocks from July to August, 2006 when exports were disrupted in the previous month due to the temporary slow down of movement of goods at the Colombo harbour, it said. Industrial exports, the largest contributor for this growth, increased by 25.0 per cent in August 2006 reflecting a robust performance in textiles and garments and rubber based products. Agricultural exports continued to grow with higher performance of tea and rubber. Cumulative exports in the first eight months of 2006 grew by 8.9 per cent from US$ 4.0 billion in 2005 to US$ 4.4 billion in 2006.

Imports grew by 26.2 per cent to US$ 994 million in August 2006, led by growth in all categories of imports i.e., consumer, intermediate and investment goods. The growth in consumer goods was led by sugar, wheat, milk products, personal motor vehicles and other consumer durables.

Imports of intermediate goods were driven by the imports of petroleum products, fertilizer, textiles and precious metals. Imports of investment goods increased by 24.1 per cent reflecting higher imports of transport equipment, machinery and equipment and building materials. Imports during the first eight months of 2006 grew by 21.1 per cent to US$ 6.8 billion.

The Bank said the trade deficit reached US$ 260 million in August 2006 and the cumulative trade deficit for the first eight months of 2006 increased to US$ 2.4 billion.

Private remittances grew by 24 per cent to US$1.5 billion during the first eight months of 2006, particularly containing the current account deficit. The overall balance of payments registered a surplus of US$ 204 million and the gross official reserves stood at US$ 2.5 billion (3.1 months of imports) by end August 2006.