Trade deficit widens in February

The External Sector report for February 2022 shows that there had been significant growth in the importation of tradable items into the economy. Despite merchandise exports growing 14.7% to just over US$ 1 billion, this was outpaced by the growth in Merchandise imports to US 1.87 billion representing a growth of 22.9%. Building material showed a growth of 29.5% on a year on year analysis. This growth in imported tradable items very closely preceded the sharp depreciation of the currency.

An increase in export earnings was observed in industrial exports and mineral exports, while a decrease was observed in agricultural exports. The cumulative export earnings, which increased by 16.1 per cent during January-February 2022 over the same period of the last year, amounted to US dollars 2,192 million.

An increase in import expenditure was observed across all main categories, with intermediate goods imports contributing mainly to the expansion. On a cumulative basis, total import expenditure amounted to US dollars 3,832 million during the period from January to February 2022, recording an increase of 23.0 per cent, compared to US dollars 3,115 million recorded in the corresponding period in 2021.

Mismanagement of the government securities market continued into February. Accordingly, there were no transactions involving foreign investors in the government securities market in February 2022. Cumulative net inflow from the government securities market during the two months up to February 2022 amounted to US dollars 4 million, while the outstanding exposure to foreign holdings remained low at US dollars 13 million as of the end of February 2022.