Sharp drop in vehicle imports (54%) in Aug 2012-CB says
View(s):The decelerating trend in the trade balance continued into August 2012, the Central Bank (CB) said this week, adding that the trade balance recorded a year-on-year increase of 6.3 per cent for the first eight months of 2012.
“The deceleration in the trade balance reflects the decline in imports since April this year, amidst the slowing down of exports. Policy measures adopted by the government and the Central Bank earlier this year have resulted in imports declining from the high levels recorded for last year. Waning global demand along with faltering global economic activity, as well as lower prices for several key items exported in view of the sharp decline in the prices of commodities such as cotton and rubber, which constitute key inputs into these exports, have resulted in exports slowing down,” the CB said in a media statement. Spending in August on imports of both consumer goods and intermediate goods declined while expenditure on imports of investment goods recorded an increase, on a year-on-year basis. The decline in consumer goods imports led the overall decline in imports.
While expenditure on imports of food and beverages as well as non-food consumer goods declined, vehicle imports, which declined by 54 per cent, year-on-year, made the largest contribution towards the decline in expenditure on consumer goods imports. With respect to imports of intermediate goods, expenditure on imports of textiles, which have accounted for about 10 per cent of total imports, decreased in August, partly reflecting the lower prices in the world market for cotton.
The CB said fertiliser imports, which increased in value terms by nearly 72 per cent, year-on-year, and amounted to around US$77 million and imports of petroleum, which increased marginally by 0.8 per cent, year-on-year, meanwhile, negated to some extent the decline in expenditure on imports as a result of lower expenditure on the aforementioned items.
The decline in export earnings in August 2012 was driven by exports of both industrial goods and agricultural goods. The decline in earnings from exports of garments, which account for about 40 per cent of total exports; food, beverages and tobacco; and printing industry products mainly accounted for the decline in earnings from industrial exports. The decline in export earnings from tea, rubber and coconuts and coconut based products largely accounted for the decline in earnings from agricultural goods exports. Earnings from tourism in August grew by 16.4 per cent, year-on-year, to $82 million, while during the first eight months of 2012, earnings from tourism have grown at a rate of 23 per cent, year-on-year, to $642 million.
Workers’ remittances grew by 6.9 per cent, year-on-year, to $490 million in August 2012, while cumulative inflows on account of workers’ remittances during the first eight months of 2012 increased by 15.6 per cent to $3,907 million.
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