The country’s external trade continued to decline in February with imports and exports down in addition to the trade deficit shrinking sharply.
The Central Bank said yesterday earnings from exports declined by 2.9%, year-on-year, to $ 798 million in February 2013, as earnings from both agricultural exports and industrial exports declined. The dip in the first two months was 10.7% to $ 1.56 billion.
On the other hand expenditure on imports declined by 9.3%, year-on-year, to $ 1,433 million in February 2013 and by 15.6% to $ 2.95 billion in the first two months.
Consequently the trade deficit in February was down by 16.3% to $ 635.7 million and for the first two months of 2013 by 20.3%, year-on-year to $1,424 million.
“The multi-pronged policy strategy implemented during the first half of 2012 to curb the widening trade deficit has therefore continued to help reduce the deficit in the current account,” the Central Bank said.
Detailing specific performance, the Central Bank said earnings from exports of agricultural commodities declined mainly as a result of lower earnings from rubber and coconut exports. Lower export earnings from several items including diamonds, jewellery, petroleum products, rubber products and animal fodder resulted in earnings from industrial exports declining.
Nevertheless, earnings from exports of garments and textiles, which have a significant share of around 40% in total exports, increased on an year-on-year basis, by 8.8%, in February 2013. Amongst agricultural exports, earnings from exports of spices, which have continued to exhibit an increasing trend since May last year, also recorded a further increase on a year-on-year basis, in February 2013.
Expenditure on imports declined by 9.3%, year-on-year, to $ 1,433 million in February 2013. Lower expenditure on imports of refined petroleum products, transport equipment, wheat, vehicles as well as dairy products have made a significant contribution towards the decline in import expenditure in February 2013. However, expenditure on imports of intermediate goods such as textiles and textile articles, gold, mineral products, diamonds and precious and semi-precious stones increased on a year-on-year basis in February 2013.
Imports of textiles and textile articles grew by 18.3%, year-on-year, in value terms, indicating higher potential earnings from exports of apparel products in the coming months.
Import expenditure on investment goods meanwhile declined on a year-on-year basis in February 2013, as imports of transport equipment declined. However, import expenditure on building materials and machinery and equipment categorised under investment goods, increased in February 2013. With respect to consumer goods imports, expenditure on imports of food and beverages as well as non-food consumer goods declined. Vehicle imports, which declined by 41.4%, year-on-year, made the largest contribution towards the decline in expenditure on consumer goods imports.