Sri Lanka heads for record trade deficit
AFP, Colombo
Sri Lanka heads for a record trade deficit in 2004 as rising global oil prices drain foreign currency reserves and threaten economic stability, the central bank said Wednesday. The island nation imports all of its oil needs which has fuelled a 20 percent increase in imports for the first 10 months of this year to 6.4 billion dollars, the Central Bank of Sri Lanka said. This compared to a 12 percent rise in exports to 4.7 billion dollars over the same period, the central bank said. The trade deficit of 1.7 billion dollars for the first 10 months exceeds the previous record of 1.5 billion dollars set in 1994 and the 2003 deficit of 1.1 billion dollars. Sri Lanka is facing double-digit inflation and a weaker currency with the rupee falling 9.0 percent against the dollar this year. Foreign currency reserves dropped 16 percent to 1.9 billion dollars in the first nine months of 2004.
| 
