The central bank report total expenditure on import in Sri Lanka is US dollars 1,534 million in July 2015 which decline by 16.9% compare to year 2014.
Along with exports, imports form the backbone of international trade in a country. According to Investopedia the word “import” is derived from the word “port,” and countries are most likely to import goods that domestic industries cannot produce as efficiently or cheaply, also import raw materials or commodities that are not available within its borders.
Currently, Sri Lanka known to be the most liberalized economy in the entire region of South Asia. Imports play one of the major role to GDP growth rate of 6.40 % in the first quarter of 2015 over the previous quarter. Sri Lanka imports petroleum, vehicles, textile fabrics, foodstuffs and machinery and transportation equipment. Main import origins are India, China, Iran and Singapore.
A trade deficit represents an outflow of domestic currency to foreign markets. According to CB in Sri Lanka, the external sector performance improved in mid of 2015, with a lower trade deficit due to strong tourist earnings and deceleration of import expenditures. Imports can exert a (more or less) powerful influence on price and quality levels of domestic production, acting as a brake for inflation, as a challenge for managers and producers at large, as a supply for domestic downstream productions.
Imports Performance Forecast
Reported by the Central Bank of Sri Lanka, imports in Sri Lanka decreased to 1,534 USD Million in July from 1633.30 USD Million in June of 2015. From 2001 until 2015 recorded averaged is 1076.80 USD Million, reaching an all-time high of 1986.40 USD Million in November of 2011 and a record low of 408 USD Million in February of 2002. Expenditure on imports increased by 7.9 per cent to US$ 19.4 billion in 2014.
Import Prices in Sri Lanka increased to 121.40 Index Points in May from 119.70 Index Points in April of 2015. Import Prices in Sri Lanka is reported by the Central Bank of Sri Lanka. In Sri Lanka, Import Prices correspond to the rate of change in the prices of goods and services purchased by residents from and supplied by, foreign sellers. Import Prices are heavily affected by exchange rates too.
Performance Based on Category
Total expenditure on import in Sri Lanka is US dollars 1,534 million in July 2015 which decline by 16.9% compare to year 2014.According to the CB, the cumulative trade deficit in July was 6 per cent, down from 15.6 per cent recorded in June this year.
- Intermediate Goods
The contrast reduce of fuel bill is the major contributor to the overall decline which 66.1% during the month. In addition the average of crude oil price reduction from US dollars 110.3 to US dollars 60.5 per barrel. In addition reported by department of motor traffic and external studies reported 75% of New Vehicles in Sri Lanka are Hybrids by vendors of Toyota and Honda, with Mercedes and BMW and electric cars also seem to be increasing in popularity as the Nissan leaf entered the Sri Lanka market since year 2013 which have less fuel consumption.
Also slight decline of base metals, food preparations and fertilizers expenses result 32% of decline overall intermediate goods expenditure.
- Food & Beverages
The expenditures on food and beverages sector has significant decline of 13.8% compare to previous months of this year including sugar, dairy products and products of milling industry.
- Non Food Consumer Goods
Central bank reported that expenditure on vehicle imports have drastically increased by 107% compare to year 2014 which has mainly contribute by import of personal cars specially hybrid and three wheeler recorded by department of motor traffic. Overall expenditure for nonfood consumer goods increased up to USD 282 million including slight increment of medical and pharmaceutical products.
- Investment Goods
The total expenditure on import of investment goods are USD 365 million which has increase by 0.4% compare to year 2014 and major increment recorded from import of transport equipment by 60% and building material to USD 105 million. But there is an intermediate drop by 14% for expenditures of machinery and equipment imports.
The average expenditure on imports from January to July this year recorded as US Dollars 11, 035 million and 60% of main import accounted and originated from India, China, Japan, UAE and Singapore.