Exports grow by 12.1 per cent

EARNINGS: Export earnings grew by 12.1 per cent and reached its second highest monthly value in December 2006 after the highest value of US dollars 734 million recorded in August 2006, the Central Bank said yesterday.

Exports increased to US dollars 703 million in December 2006 compared to US dollars 627 million in December 2005. Industrial exports drove this growth aided by strong performance in textiles and garments.

Agricultural exports were affected by the temporary disruption in tea production due to the labour unrest prevailed in the plantation sector during last few weeks of 2006.

However, tea exports recorded the highest ever value of US dollars 881 million and the quantity of 327 metric tons during the year. The cumulative exports in 2006 grew by 8.4 per cent from US dollars 6,347 million in 2005 to US dollars 6,883 million in 2006.

Imports also grew by 14.8 per cent in December 2006 reflecting higher imports in all categories of imports i.e., consumer, intermediate and investment goods.

The growth in consumer goods was led by consumer durables while the growth in intermediate goods were driven by the imports of petroleum and textiles. Imports of investment goods increased reflecting higher imports of machinery and equipment and building materials. Cumulative imports in 2006 grew by 15.7 per cent from US dollars 8,863 million in 2005 to US dollars 10,253 in 2006.

The trade deficit reached US dollars 164 million in December 2006 and the overall trade deficit in 2006 increased to US dollars 3,370 million.

Private remittances grew by 21 per cent to US dollars 2,326 million in 2006, particularly containing the current account deficit.

The overall balance of payments registered a surplus of US dollars 193 million and the gross official reserves stood at US dollars 2,515 million (3 months of imports) by end December 2006.