Sri Lanka's trade deficit widens further amidst coronavirus

COLOMBO (News1st): Sri Lanka's trade deficit had widened in March, the central bank has said, amidst a "greater decline" in exports and foreign remittances, and a massive blow on tourism amidst the coronavirus pandemic. The country's trade deficit had increased to 1.8 billion US dollars from January to March, compared to the deficit of 1.6 billion US dollars during the same period last year, according to a central bank report. "...with a greater decline in the expenditure on imports compared to the decline in earnings from exports, the trade deficit narrowed over the same period in 2019," the report read. Sri Lanka's exports stood at 1.2 billion US dollars in March. "The expenditure on fuel declined, led by lower average import prices of crude oil," the central bank noted that a barrel of crude oil had been purchased at 37.7 US dollars a barrel. However, the government had not made any revision to fuel prices. The report showed that remittances sent by foreign expatriates to the country had declined by trickling in 492 million dollars in March, compared to 571 million received during the same month last year. "Workers’ remittances declined notably in March 2020, with the return of migrant workers from affected countries as well as the reported job terminations of some workers abroad," the report read. It added that remittances had declined due to a "notable number of returnees from countries such as South Korea and Italy" before the closure of airports on March 18. "This was further exacerbated by lower crude oil prices impacting Middle Eastern economies, where a majority of Sri Lankan migrant workers are employed". Meanwhile, the tourist industry, a key revenue-generating mechanism to the government, had also declined rapidly after the country shut its doors for passenger flight and ship arrivals. "...earnings from tourism were provisionally estimated to have declined to US dollars 135 million in March 2020, in comparison to US dollars 461 million in March 2019" the report showed. Tourism has generated 956 million US dollars from January to March, a 31.5 percent decline when compared to 1.3 billion US dollars generated during this period last year. Authorities are mulling the reopening of airports by August, a move that could end a four-month-long suspension on the entry of tourists to the South Asian island.