Trade deficit lowest in four years

With the sharp decline in imports the country's trade deficit contracted to 75.5 percent in February 2009 year-on-year to record US$ 78 million the lowest monthly value in four years, according to a release by the Economics and Research Department of the Central Bank. It said the sharp decline in imports significantly outpaced the fall in exports.

Meanwhile, textile and garment exports to the European Union and the United States increased by 15.4 percent and 15 percent respectively in February 2009.

Although agriculture exports, both tea and rubber, recorded a year-on-year decline due to depressed demand and lower prices, exports of coconuts however increased in February despite the lower prices in the international markets.

The cumulative trade deficit decreased by 72.0 percent to US$ 262 million in the first two months of 2009 from US$ 937 million in the corresponding period of 2008.

The current account balance was greatly eased due to private remittances being 89 percent (US$ 233 million) in excess of the trade deficit in January and February this year although there was a decrease in private remittances by 5.3 percent from US$ 523 million recorded in January 2008 to US$ 495 million in the corresponding period of 2009. The release also states that expenditure on imports declined by 37.3 percent to US$ 602 million in February 2009 in view of the reduced demand for imports within the sub sectors.

It says consumer goods declined by 33.1 percent to US$ 142.1 million in February 2009. Sugar imports declined despite the increase in the average import price by 19.5 percent in February 2009. The release also added that textile and clothing imports declined by 21.8 percent to US$ 93 million in February 2009.