Oil spikes July imports, trade deficit
A sharp rise in oil purchases in July as opposed to a year ago saw a spike in imports for the first time in three months apart from widening the trade deficit by 55%.
Import expenditure on fuel increased by 93.3%, year-on-year, to $516 million in July 2014 mainly due to the base effect of non-importation of crude oil in July 2013 and 6.5% increase in imports of refined petroleum products.
Expenditure on overall imports increased by 29% to $1,845 million in July 2014 reflecting an increase in all major import categories, but were particularly in fuel, the Central Bank said.
“Expenditure on imports also recorded an increase in July 2014 compared to the decline recorded in the preceding three months,” it added.
Spike in July imports dwarfing exports growth saw trade deficit widened by 55% to $891 million, compared to $574 million in July 2013. However, on a cumulative basis, trade deficit in first seven months of 2014 is lower by 11.5% $ 3.96 billion compared to the corresponding period in 2013.
On a cumulative basis, expenditure on imports increased by 2.9% to $ 10.8 billion during the first seven months of 2014.
Import expenditure on base metals increased by 137.9%, year-on-year to $56 million mainly due to an increase in iron, steel and copper imports. Import expenditure on consumer goods increased due to an increase in both food and non-food consumer good categories.
A substantial increase in imports of sugar and confectionery, cereals and milling industry and dairy products led the increase in import expenditure on food and beverages, while non-food consumer goods imports increased mainly due to the significant increase in clothing and accessories and vehicle imports.
Expenditure on imports of investment goods grew in July 2014 supported by imports of machinery and equipment and building materials.