Exports growth beats imports

In a significant development, for the first time this year growth rate of exports beat that of imports on a year on year comparative basis.

The Central Bank yesterday announced exports in October grew by 27.6% to a third highest ever monthly figure of $ 802 million. Imports on the other hand grew by only 8.4% to $ 1.13 billion.

It was the first time since December 2009 that growth rate of exports outpaced that of imports.In December 2009, exports grew by 6.4% whilst imports moved up by 0.5% year on year.

Thanks to strong growth in exports, first 10 months performance reflected a growth of 13.2% to $ 6.5 billion.  Since July cumulative exports growth has been hovering around 11 to 10% whilst in the first half cumulative exports were up 13.7%.

Central Bank said higher export earnings from the textile and garments and minor agricultural crops helped strong performance in October.

“The largest contribution to the growth in exports in October, 2010 was from the industrial sector, led by significant increases in earnings from textile and garments, rubber products and machinery and equipment.  Earnings from garment exports to the EU and USA increased by 27.4% and 33.1%, respectively, in October 2010,” the Central Bank added.

It said although, earnings from diamonds and jewellery exports declined by 10.0%, growth in earning from all other sub categories of industrial exports exceeded 26% in October. Earnings from agricultural exports, which have taken on an increasing trend since April 2010, improved further in October, mainly reflecting higher prices. The average export prices of tea and rubber continued to remain high at US$ 4.43 per kg and US$ 3.81 per kg, respectively, in October 2010. Earnings from minor agricultural exports increased by 35.9% to US$ 34 million in October, led by higher earnings from cinnamon and pepper.

Expenditure on imports increased by 8.4% to US$ 1,131 million in October, mainly due to substantial increases in imports of non food consumer goods. Cumulative expenditure on imports during the first 10 months of 2010 increased by 32.8%, year-on year, to US$ 10,863 million. As a result, the trade deficit expanded to US$ 4,357 million during this period compared to US$ 2,431 million in the corresponding period of 2009.

Expenditure on imports of consumer goods rose in October due to higher imports of non-food consumer goods, led by motor vehicles. Expenditure on food imports also increased, mainly due to higher prices of sugar imports and increased import volumes of milk products. However, expenditure on wheat and rice imports declined, in terms of both prices and volumes, compared to October 2009.

Expenditure on imports of intermediate goods decreased as the expenditure on both, petroleum and fertilizer imports, declined by more than 50% due to lower volumes of imports. The average import price of crude oil increased by 11.3% to US$ 80.99 per barrel in October 2010, from US dollars 72.80 per barrel in October 2009.

Textile and clothing imports, grew by 50.9%, year-on-year, reflecting higher potential earnings from exports of apparel products in the coming months.  All sub categories of investment goods imports, except transport equipment, increased in October.



Remittances up 22% to $ 3.38 b

DURING the first 10 months of 2010, workers’ remittances increased by 21.9% to US$ 3,380 million (after adjusting for revisions by commercial banks) over that of the corresponding period of 2009. The gross official reserves continued to remain significantly above the targeted level and stood at US$ 6.6 billion by end November 2010 without Asian Clearing Union (ACU) funds.

Based on the previous 12 months average expenditure on imports of US$ 1,084 million per month, the gross official reserves, without ACU funds, were equivalent to 6.1 months of imports.