Sri Lanka’s trade deficit widens despite record exports
February 2, 2025 08:59 am
Sri Lanka’s cumulative deficit in the trade account has widened to USD 6 billion in 2024 compared to USD 4.9 billion in 2023.
Releasing the external sector report for December 2024, the Central Bank of Sri Lanka (CBSL) noted that although Sri Lanka recorded the second highest annual export earnings in history, the expansion in import expenditure outpaced the expansion of export earnings, leading to the higher trade deficit.
Sri Lanka’s earnings from merchandise exports increased by 7.2% year-on-year to USD 12.8 billion in 2024. The figure marks the second highest annual export earnings in history.
Meanwhile, expenditure on merchandise imports in 2024 amounted to USD 18.9 billion, reflecting a year-on-year increase of 12.1%, driven by growth in all major import categories.
Additionally, foreign investments in the government securities market recorded a net outflow of USD 179 million in 2024.
However, a net inflow was observed in the last 3 months of 2024, and the net inflow in December 2024 was USD 18 million.
The gross official reserves stood at USD 6.1 billion at end 2024 compared to USD 4.4 billion at end 2023, supported by net purchases by the central bank from the domestic foreign exchange market during 2024 at historically high levels and funds received from multilateral institutions.
The GOR includes the USD 1.4 billion currency swap facility with the People’s Bank of China, which was renewed for 3 years in December 2024.
