Sri Lanka’s imports in October declined for the eighth consecutive month, despite recording an increase, compared to September 2022.
Central Bank said expenditure on merchandise imports declined by 21.2% to $ 1,336 million in October 2022, compared to $ 1,694 million in October 2021 but grew compared to the September 2022 figure of $ 1,284 million.
On a cumulative basis, import expenditure from January to October 2022 amounted to $ 15,421 million, down 7.3% from $ 16,632 million recorded in the corresponding period in 2021.
CBSL said the import volume index declined by 28.9% (y-o-y), while the import unit value index increased by 10.9%, in October 2022, implying that the decline in import expenditure in October 2022, compared to October 2021, was mainly driven by the volume effect.
Earnings from merchandise exports declined in October 2022, on a year-on-year basis, for the first time since March 2022, mainly due to lower earnings from garments exports. Resultantly the merchandise trade deficit recorded a notable contraction in October 2022 to $ 285 million compared to the previous year’s figure of $ 502 million.
Exports in the first 10 months were $ 11 billion up 9%. Trade deficit reduced to $ 4.38 billion from $ 6.5 billion.
Detailing November import sector performance, CBSL said a decline in import expenditure was observed in intermediate goods, investment goods and non-food consumer goods, mainly reflecting the lower activities in the economy, compared to 2021 and measures to compress imports, while an increase was recorded in imports of food and beverages.
Consumer goods: Expenditure on the importation of consumer goods declined by 13.5% in
October 2022, compared to October 2021, led by lower expenditure on non-food consumer goods.
The decline in import expenditure on non-food consumer goods was observed in almost all subcategories, with a notable drop in imports of home appliances (primarily, televisions and refrigerators); telecommunication devices (primarily, mobile telephones); household and furniture items; medical and pharmaceuticals; and clothing and accessories. Meanwhile, expenditure on the importation on food and beverages increased by 22.1% in October 2022 (y-o-y), mainly with an increase in import volumes of cereals and milling industry products (primarily, rice) and sugar.
Further, the imports of vegetables (mainly, dhal and potatoes) also improved to some extent. In contrast, expenditure on dairy products (mainly, milk powder), oils and fats (mainly, coconut oil), seafood (mainly, dried fish), fruits and spices declined in October 2022, compared to October 2021, which was mostly led by lower import volumes.
Intermediate goods: Expenditure on the importation of intermediate goods declined by 16.5% in October 2022, compared to October 2021, with a substantial share of decrease contributed by base metals imports (primarily, iron and steel). Other categories of intermediate goods that recorded a large decline include wheat grain and maize; textiles and textile articles (mainly, fabrics); rubber and rubber articles (both natural and synthetic rubber in primary form); and vehicle and machinery parts (mainly, motor vehicle and bicycle parts).
Meanwhile, the importation of fuel, unmanufactured tobacco and fertiliser increased in October 2022, compared to October 2021. Despite the nonimportation of crude oil in the month, expenditure on fuel imports increased by 3.0% (y-o-y) recording at $ 397 million, due to the substantial increase in average import prices of refined petroleum products and coal, although imported volumes declined, compared to October 2021.
Investment goods: Import expenditure on investment goods recorded a broad-based decline of 42.5% in October 2022, compared to the same month in 2021. Under machinery and equipment, medical and laboratory equipment, machinery and equipment parts, engineering equipment, office machines, telecommunication devices and electrical machinery and equipment recorded a significant decline, among others. Import expenditure on building material decreased, mainly owing to lower imports of iron and steel (primarily, iron bars and rods), and articles of iron and steel.
Lower importation of agricultural tractors contributed mainly to the decline in the import expenditure on transport equipment.