Trade deficit tops $ 5 b mark by July

Wednesday, 28 September 2011 00:57 - - {{hitsCtrl.values.hits}}

Country’s external trade remained robust in July though soaring imports saw trade deficit top the $ 5 billion mark in the first seven months.

Exports in July amounted to $ 957.6 million up 9.4% over a higher base in the corresponding month of last year whilst imports remained high at $ 1.77 billion, up by 58%. First seven months exports topped the $ 6 billion mark, reflecting a 30.3% growth whilst imports surpassed the $ 11 billion threshold signifying a 48.3% growth. Exports crossed the $ 5 billion mark in June and imports surpassed $ 9 billion figure.

Trade deficit in the first seven months topped the $ 5 billion mark reflecting a 77.5% increase higher in comparison to a 62.7% rise in the first half.

Central Bank said the largest contribution to the growth in exports in July was from the industrial sector, led by a significant increase in exports of machinery and equipment, diamond and jewellery and textiles and garments.

Earnings from exports of machinery and equipment increased by 88.6% to $ 85 million in July 2011. This comprised mainly cruise ship, transformers, static converters, inductors, circuits and insulated cables.

Exports of diamond and jewellery increased by 87.5% to $ 45 million, year-on-year while earnings from textiles and garments increased by 5.0% to $385 million in July 2011 recording the highest monthly value.

Agricultural exports, which accounted for 21.5% of export earnings in July 2011, decreased by 3.6% to $ 205 million, mainly due to lower value and volume of tea exports. Earnings from rubber exports increased substantially while higher prices fetched by minor agricultural exports supported higher exports in the category.

All major categories of imports increased in July 2011, reflecting higher domestic demand. The largest contribution to the overall increase was from intermediate goods (56.1%), followed by investment goods (25.5%).

Expenditure on imports of intermediate goods increased by 58.0% to $ 999 million led by significant increases in petroleum and fertiliser imports in July 2011. The average import price of crude oil stood at $ 112.85 per barrel in July 2011 compared to $ 73.53 per barrel in July 2010. Expenditure on imports of fertiliser increased to $ 54 million in July 2011 due to higher import volumes and higher price.

Imports of investment goods increased by 62.1% to $ 384 million in July 2011, led by higher expenditure on imports of machinery and equipment ($ 178 million) and building materials ($ 105 million). Imports of consumer goods increased by 39.1% in July 2011 led by non-food consumer goods, particularly, motor vehicles ($ 87 million), while food and beverages imports increased by 22.9% with a higher contribution from wheat in July 2011.

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