Business

Deficit in merchandise trade account narrows

Published

3 years ago

2023/05/2

External Sector Performance – March 2023

The deficit in the merchandise trade account narrowed to US dollars 412 million in March 2023, from US dollars 761 million in March 2022, mainly due to the subdued level of imports, compared to a year earlier. However, the trade deficit in March 2023 widened significantly, compared to February 2023, reflecting the increase in imports due to seasonal demand. The cumulative deficit in the trade account during January-March 2023 was US dollars 861 million, declined from US dollars 2,397 million recorded over the same period in 2022. The major contributory factors for this change in trade balance are shown in Figure 1.

Overall Exports: The merchandise exports recovered in March 2023 recording over US dollars 1 billion for the first time during 2023. However, earnings from merchandise exports declined marginally by 2.0 per cent in March 2023, year-on-year, to US dollars 1,037 million. The decline in earnings from industrial exports, including garments, mainly contributed to the decline in export earnings in March 2023, compared to a year earlier. Meanwhile, export earnings have improved on a month-on-month basis mainly due to higher exports of gems, diamonds and jewellery and rubber products. Cumulative export earnings during January-March 2023 recorded at US dollars 2,998 million, a decline of 7.9 per cent over the same period in the last year.

Industrial Exports: Earnings from the exports of industrial goods declined in March 2023, compared to March 2022, with a significant share of the decline being contributed by garments. Accordingly, exports of garments to most of the major markets (the USA, the EU and the UK) recorded declines. Earnings from the export of petroleum products decreased due to the decline in the average export prices of bunker fuel exports. In contrast, earnings from machinery and mechanical appliances (mainly, machinery and equipment parts); gems, diamonds, and jewellery; and rubber products (mainly, rubber tires) increased in March 2023.

Agricultural Exports: Earnings from the export of agricultural goods increased in March 2023, compared to a year ago, mainly due to the increase in earnings from tea, spices (primarily, cinnamon and cloves) and seafood (primarily, processed fish). Earnings from tea exports improved due to the increase in average export prices of tea although the volume continued its declining trend owing to the lagged effect of fertiliser shortages. However, there was a decline in export earnings from coconut related products (primarily, desiccated coconut and fibres), minor agricultural products (primarily, arecanuts) and natural rubber in March 2023.

Mineral Exports: Earnings from mineral exports increased in March 2023, compared to March 2022, mainly due to the increase in exports of granite under earths and stone.

Overall Imports: Import expenditure increased significantly to US dollars 1,450 million in March 2023, compared to US dollars 1,021 million in February 2023, due to seasonal demand and the partial recovery in fuel imports. However, continuing the year-on-year declining trend since early 2022, the import expenditure declined by 20.3 per cent in March 2023. The year-on-year decline in expenditure was observed in all major import sectors, although the decline in intermediate and investment goods was substantial. Meanwhile, cumulative import expenditure during January-March 2023 declined by 31.7 per cent over the corresponding period in 2022.

Consumer Goods: Expenditure on the importation of consumer goods declined in March 2023, compared to a year ago, due to lower expenditure on food and beverages imports although non-food consumer goods imports recorded a marginal increase. The decline in import expenditure on food and beverages goods was broad-based, with a notable drop in imports of cereals and milling industry products (mainly, rice), dairy products, spices and fruits. In contrast, expenditure on non-food consumer goods increased marginally due to higher medical and pharmaceuticals (mainly, medicaments), while most of other subcategories declined, compared to March 2022.

Intermediate Goods: Expenditure on the importation of intermediate goods declined in March 2023, compared to a year ago, driven by lower imports of fuel, plastics and articles thereof, and textiles and textile articles (primarily, fabrics). However, almost all subsectors under intermediate goods increased in March 2023, compared to the previous month, in that import expenditure on fuel increased by over 90 per cent, month-on-month. A sizable decline was recorded in the importation of rubber and articles thereof, base metals (primarily, iron and steel) and chemical products. However, the categories of intermediate goods that recorded an increase include wheat, fertiliser and agricultural inputs (primarily, animal fodder), compared to a year ago.

Investment Goods: Import expenditure on investment goods declined significantly in March 2023, compared to March 2022. Almost all types of goods listed under the three main investment good categories, namely machinery and equipment, building material and transport equipment, recorded a decline. (CBSL)

All News Advertisement

Related Topics:Central bank Report External Sector Performance – March 2023

Up Next

SEC and CSE continue their stock market awareness in Ampara

Don't Miss

Dialog Axiata partners Gamata Sanniwedanaya project initiated by TRCSL: First phase launched in Ratnapura

Click to comment

Business

“ViYASA” National Business Facilitation Centre (NBFC) to be opened tomorrow (22)

Published

57 mins ago

2026/09/21

Priyan

The National Business Facilitation Centre (NBFC), which is being established under the Presidential Secretariat with the aim of removing administrative and regulatory barriers that exist among government institutions in relation to investment and industry and expediting these processes, will be opened tomorrow (22).

The centre is being established on the President’s initiative with the aim of bringing about a positive transformation in the industrial sector. The centre will provide solutions to issues that arise in dealing with the government machinery when starting and operating a business, while also coordinating with the relevant government institutions to provide the necessary facilities.

The “ViYASA” National Business Facilitation Centre (NBFC) has been established at Building C-80, Hector Kobbekaduwa Mawatha, Colombo 07, and is headed by Senior Additional( Secretary to the President, Seevali Arukgoda.

The centre will be opened under the patronage of Minister of Labour and Deputy Minister of Finance and Planning Dr Anil Jayantha Fernando and Minister of Industry and Entrepreneurship Development Sunil Handunnetti, with the participation of Secretary to the President Dr Nandika Sanath Kumanayake.

The website https://nbfc.presidentsoffice.gov.lk is also scheduled to be officially launched on the occasion.

President’s Media Division)

Business

Charting a worker-centered AI future: Colombo hosts landmark ITF conference

Published

18 hours ago

2026/09/21

Thilina Walpola

The ITF’s first-ever AI-focused global conference and the first of its kind hosted in Sri Lanka

By Sanath Nanayakkare

Artificial intelligence and automation present serious challenges for workers – such as job consequences seen in docks and rail systems – and emphasises that workers cannot simply stop technological progress. By gathering young trade unionists in Sri Lanka, the ITF aims to establish key principles for engaging with technology, ensuring workers have a strong voice at the bargaining table, and encouraging constructive social dialogue with corporations and governments.

These compelling words from ITF General Secretary Stephen Cotton underscored the urgent reality facing modern labor as rapid technological advancements sweep across global industries.

Confronting this shifting landscape head-on, the International Transport Workers’ Federation (ITF), in partnership with the National Union of Seafarers of Sri Lanka (NUSS), convened a ground-breaking conference on artificial intelligence in Colombo from September 15–17.

As the ITF’s first-ever AI-focused global conference and the first of its kind hosted in Sri Lanka, the landmark event marked a critical milestone in balancing technological innovation with worker-centered safeguards.

Representing over 16.6 million transport workers worldwide, the ITF designed the gathering to tackle the multifaceted impacts of AI on safety, operations, workforce development, and governance. Rather than resisting progress, the conference focused on proactive engagement, establishing guiding principles to protect workers’ rights and privacy both at sea and on land.

Key discussions centred on sharing best practices for upskilling and reskilling transport personnel, ensuring that human oversight remains central to AI-driven logistics, routing, and maintenance.

Reflecting on the historic nature of the event, Boa Athu, CEO of National Union of Seafarers Asia Pacific, noted that the conference represented a monumental moment as AI emerges as a permanent fixture of contemporary life.

Highlighting NUSS’s pride in hosting the event in Colombo, Athu emphasised that AI offers transformative potential when guided by strong social dialogue, equitable access to training, and robust governance safeguards.

Ultimately, the Colombo conference demonstrated that the future of transport must be shaped by those who keep the world moving. By uniting international labour leaders, affiliates, port operators, and regulators, the event laid a vital foundation for inclusive policy frameworks that champion fair labour standards, securing a powerful voice for workers in an automated tomorrow.

Business

Bridging the digital divide: Sri Lanka’s airport licence challenge

Published

18 hours ago

2026/09/21

Thilina Walpola

As tourism surges from digitally advanced markets like India, modern independent travelers arriving at BIA find themselves caught in a mismatch between cloudstored credentials and local paper-based transport protocols.

By Sanath Nanayakkare

As Sri Lanka experiences a surge in visitors from its largest tourist market, India, a modern administrative hurdle has emerged at Bandaranaike International Airport (BIA).

While nations like India and Pakistan have successfully transitioned to fully digital driving licences and cashless ecosystems, Sri Lanka’s Department of Motor Traffic counter still requires a physical card to issue temporary local permits, The Island Financial Review learns.

This mismatch creates significant friction for independent travelers who rely entirely on smartphones and cloud-stored credentials. Tourists turned away at the airport – and sometimes redirected to the Werahera office in vain – find themselves unable to legally rent and drive vehicles. Consequently, this policy gap harms local car rental operators, causes tourist frustration, and deprives the government of valuable permit revenue.

The situation highlights a distinct irony: Sri Lankan motorists easily travel abroad using International Driving Permits that are readily accepted in India and Pakistan, yet local infrastructure cannot reciprocate due to outdated verification systems.

Recognizing the problem, Department of Motor Traffic officials have noted that upgrades and new equipment are currently in the works to integrate foreign digital platforms.

For a nation aggressively pursuing a national digitalisation drive, rapidly modernising these transport protocols is essential to keeping pace with global travelers and unlocking the full potential of its tourism economy.