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Wednesday, March 29, 2023

March imports record first YoY decline since Feb 2021 – The Morning

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  • Dip in import of consumer goods and investment goods

Expenditure on merchandise imports, which has been falling on a month-on-month basis since January 2022, continued to decline, recording the first year-on-year (YoY) decline since February 2021, according to the Central Bank of Sri Lanka’s (CBSL) external sector reports. 

Accordingly, import expenditure declined by 5.6% to $ 1,819 million in March 2022, compared to $ 1,926 million recorded in March 2021.

A decline in expenditure was observed in import of consumer goods and investment goods, while an increase was recorded in import of intermediate goods. On a cumulative basis, total import expenditure amounted to $ 5,651 million during the first quarter of 2022, recording an increase of 12.1% YoY. 

Considering the continuous pressure on the external sector, the Government imposed several restrictions on selected non-urgent and non-essential consumer items during March 2022, such as import license requirements, while increasing import duties.

Expenditure on the importation of consumer goods declined by 25.7% in March 2022, compared to March 2021, with a 13.6% reduction in food and beverages and a 37.8% reduction in non-food consumer goods. 

The YoY decline in food and beverages import expenditure was primarily driven by the lower import volume of sugar and vegetables (mainly onions and dhal). Further, a sizable decrease was observed in import expenditure, led by lower volumes of oils and fats (mainly coconut oil), dairy products (mainly milk powder), and spices (mainly chillies).

However, expenditure on cereals and milling-industry products remained high in March 2022, compared to March 2021, mainly due to the increase in expenditure on rice imports. Expenditure on the importation of beverages also increased to some extent.

The decline in expenditure on non-food consumer goods was driven by the decline in the importation of telecommunication devices (mainly mobile phones), home appliances (mainly televisions), and medical and pharmaceuticals (mainly medicaments), while clothing and accessories, such as footwear and suits, recorded an increase.

Expenditure on the import of intermediate goods increased by 4.2% YoY in March 2022. Expenditure on fuel led the increase, although import expenditure on many other intermediate goods decreased, particularly base metals (mainly iron and steel), chemical products (mainly dyeing, tanning and colouring and inorganic chemical elements), plastics, and articles thereof, rubber and articles thereof, vehicle and machinery parts (mainly electrical machinery parts and motor vehicle parts), and textiles and textile articles (mainly yarn).

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