Trade deficit narrows

Import expenditure declined, year-on-year, for the second consecutive month, while earnings from exports increased in April 2022.

This reduction in imports gathered pace in May 2022, as per the provisional data from Customs. As a result, the trade deficit recorded a notable year-on-year contraction.

Workers’ remittances rebounded in May 2022 supporting the stability of the external current account recording at US dollars 24 9 million during April 2022, in comparison to US dollars 318 million in the previous month and US dollars 519 million in the corresponding month in the previous year.

Total departures for foreign employment were recorded at 22,148 during the month of April 2022, contributed by the unskilled (7, 327), skilled (6,437) and domestic aid (5,398) categories totaling to 91,563.

The trade deficit recorded a month-on-month decline for the fourth consecutive month in April 2022, supported by the policy measures that were aimed at discouraging non urgent imports. The deficit in the trade account narrowed to US dollars 729 million in April 2022, compared to the deficit of US dollars 889 million recorded in April 2021.

However, the cumulative deficit in the trade account during January-April 2022 widened to US dollars 3,131 million from US dollars 2,948 million recorded over the same period in 2021. Earnings from merchandise exports in April 2022 increased by 18.5% over April 2021, recording at US dollars 970 million. Meanwhile Expenditure on merchandise imports marginally declined by 0.5% to US dollars 1,699 million.

A decline in expenditure was observed in import of non-food consumer goods and investment goods, while an increase was recorded in import of food and intermediate goods.

The restrictions imposed by the Government on the importation of non-urgent goods and the impact of large depreciation of the exchange rate may have contributed to this decline. On a cumulative basis, total import expenditure amounted to US dollars 7,350 million during January – April 2022, recording an increase of 8.9% (y-o-y). Expenditure on the importation of consumer goods declined by 15.4% compared to April 2021, due to the 43.4% reduction in non-food consumer goods imports.

This decline in expenditure on non-food consumer goods was broad-based but the drop in imports of telecommunication devices (mainly, mobile phones), home appliances (mainly, televisions), and medical and pharmaceuticals (mainly, medicaments) was notable. However, a slight increase in expenditure was recorded in clothing and accessories.

Expenditure on the importation of intermediate goods increased by 11.3%, compared to a year ago, driven by imports of fuel and textile and articles.

Import expenditure on investment goods declined by 24.6%.Foreign investments in the government securities market recorded a marginal net inflow increasing to US dollars 4 million.