Sri Lanka's trade deficit narrowed to $2.12 billion in the first eight months of 2007 as exports, led by textiles, outpaced imports of goods like petroleum and fertiliser, the central bank said on Monday.
The deficit narrowed 11.6 percent from $2.4 billion during the same period last year, but analysts say a sharp depreciation of the rupee against the dollar, inflation at highs not seen since 1994 and high oil prices are souring the picture.