Sri Lanka’s trade deficit saw a marginal improvement in August 2015 thanks to a sharp slowdown in import expenditure. The deficit in the trade account in August 2015 contracted marginally by one per cent. Total earnings from exports declined by a sharp 19.5 per cent, year-on-year, and expenditure on imports declined by 11.7 per cent.

Despite the slowdown in imports during the first eight months of 2015, the cumulative trade deficit at end August 2015 had increased by five per cent, as a result of poor export performance on account of damped global demand.

Export earnings from textiles and garments, which accounted for half of the exports in the month, declined by 6.6 per cent, reflecting a reduction in exports to the EU market for the sixth consecutive month.

On a cumulative basis, export earnings declined by 3.4 per cent, year-on-year, during the first eight months of 2015 largely due to weak global demand. The leading markets for merchandise exports of Sri Lanka during the first eight months of 2015 were the USA, UK, India, Germany and Italy, accounting for about 51 per cent of total exports.

During the period from January to August 2015, Sri Lanka’s main imports were from India, China, Japan, UAE and Singapore, accounting for about 61 per cent of total imports.