Trade deficit drops 12 percent

The trade deficit dropped 12.1 percent to US$ 2,621 million in the first four months of this year from US$ 2.980.9 million in 2013, the Ministry of Finance mid year report stated.

The decline in deficit was due to higher growth in exports compared to imports. All export categories recorded a healthy growth except petroleum products. Export of tea and garments, the country’s largest export sectors, accounting for about 60 percent of exports, increased despite the global slowdown in Europe and the US. The Balance of Payments strengthened with the continued improvement in expatriate remittances amounting to US$ 2,217 million and income from tourism amounting to US$ 772 million during the first four months of this year, the report said.

Nevertheless, the increased import expenditure on petroleum products underscores the importance of domestic substitution of energy in addition to taking measures to enhance exports to overcome Balance of Payment difficulties.

The external sector performance continued to improve during the first four months of this year.

Exports increased by 16.9 percent to US$ 3,571 million while imports also increased albeit at a lower rate of 2.6 percent to US$ 6,192.3 million.

The trade deficit declined by 12.1 percent to US$ 2,621.2 million during the first four months of 2014 compared to US$ 2,981.0 million during the corresponding period in 2013.