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Exports, imports dipped in April month-on-month though growing year-on-year showing a mixed performance in external trade as per latest data released by the Central Bank.
Earnings from merchandise exports increased by 3.4% to $ 878 million in April 2024 compared to $ 849 million in April 2023. In March merchandise exports increased by 9.8% to $ 1,139 million. Exports value in April last year was lowest since April 2021.
Expenditure on merchandise imports recorded a marginal increase of 0.3% to 1,435 million in April 2024 compared to $ 1,431 million in April 2023. In March imports amounted to $1,508 million.
First four months exports were up 5.5% to $4 billion and imports by 9.5% to $ 5.8 billion.
The deficit in the merchandise trade account narrowed to $ 558 million in April 2024 from $ 583 million recorded in April 2023. However, it widened compared to March 2024 ($ 359 million). Meanwhile, the cumulative deficit in the trade account during January to April 2024 widened to $ 1,777 million from $ 1,479 million recorded over the same period in 2023.
In exports, there was an increase in earnings across all major categories of exports, where industrial exports increased the most, despite a decline in garments exports. The increase in industrial goods exports in April 2024 was mainly contributed by petroleum products due to the increase in volumes of bunkering and aviation fuel exports. Earnings from exports of agricultural goods improved in April 2024 mainly driven by coconut-related products and tea (led by higher volumes), despite a decline in spice exports. Earnings from mineral exports also increased in April 2024. However, earnings from exports declined in April 2024 compared to March 2024, resulting in broad-based declines due to festive seasonal effects.
CBSL also said expenditure of investment goods contributed to this increase in import expenditure, while a decline was recorded in the import of intermediate and consumer goods. The decline in expenditure on consumer goods imports in April 2024 compared to a year ago was due to the decline in expenditure on non-food consumer goods led by lower medical and pharmaceutical imports. Meanwhile, expenditure on intermediate goods imports declined primarily due to lower fuel imports compared to April 2023.
However, expenditure on textiles and textile articles, base metals (mainly iron and steel) and chemical products increased in April 2024. Expenditure on investment goods recorded a broad-based increase, driven primarily by higher imports of machinery and equipment and building materials. Meanwhile, expenditure on imports in April 2024 declined compared to March 2024 primarily due to the decline in fuel expenditure.
Terms of trade, i.e., the ratio of the price of exports to the price of imports, improved by 9.6% in April 2024 compared to April 2023, as the decline in the prices of imports surpassed the decline in the prices of exports. The export volume index increased by 5.0%, while the unit value index declined by 1.5%, implying that the increase in export earnings in April 2024 compared to April 2023 can be attributed to higher export volumes.
Similarly, the import volume index improved by 11.7%, while the unit value index declined by 10.2%, implying that the increase in import expenditure in April 2024 compared to April 2023 was also driven by the volume effect.
