September trade gap widens over 40%

15 November 2013 03:36 am

Imports up 23% to US $ 1.6bn Exports up 11% to US $ 890mn Fuel bill up 62% to US $ 517mn Vehicle imports doubled

The imports to the country during the month of September rose 23 percent Year-on-Year (YoY) to US $ 1.61 billion and exports grew by 11 percent to US $ 890 million, expanding the country’s trade gap by 41.1 percent or US $ 698 million, external sector data showed.

The imports to the country during the month of September rose 23 percent Year-on-Year (YoY) to US $ 1.61 billion and exports grew by 11 percent to US $ 890 million, expanding the country’s trade gap by 41.1 percent or US $ 698 million, external sector data showed.

This is a reversal of the month of August’s trade figures which demonstrated a decline in both imports and trade deficit.

Imports were weighed mostly by fuel imports which rose 62 percent to US $ 517 million as a result of the government importing expensive refined oil from alternative markets due to the oil embargo on Iran.

The impact of fuel on country’s import bill is expected to increase further because the country is resorting to refined oil for the entire requirement.

Perhaps a backfiring of Central Bank’s interest rate cut in May, vehicle imports increased by 99.6 percent YoY, making the highest contribution to the consumer goods import increase.

Due to country’s current construction boom, the machinery and equipment imports rose by 37 percent YoY to US $ 197 million while building materials rose 21 percent to US $ 102 million. However transport equipment imports declined 31 percent YoY to US $ 36 million.

Expenditure on fertilizer imports also increased by 51 percent YoY to ensure availability of adequate stocks for the upcoming Maha season.

Consumer goods rose by 13 percent YoY to US $ 233 million, led by an increase in non-food consumer goods.