Growth in June exports

Earnings from exports grew by 31.6 percent in June 2011, while expenditure on imports increased by 49.6 percent.

The cumulative earnings from exports and expenditure on imports during the first half of 2011 increased by 35.2 percent to US dollars 5,057 million and 46.5 percent to US dollars 9,307 million, respectively. The trade deficit expanded to US dollars 4,250 million during the period, the Central Bank said yesterday.

Growth in export earnings in June 2011 was led by industrial exports, particularly textiles and garments and rubber products. Earnings from food, beverages and tobacco exports decreased reflecting lower exports of cocoa preparations and seafood.

The average export prices of tea and rubber remained around US dollars 4.54 per kg and US dollars 5.042 per kg, respectively.

Earnings from minor agricultural product exports increased by 26.0 percent to US$ 34 million, mainly due to the higher prices. Increased earnings from mineral exports were led by higher exports of gems.

Increased domestic demand as well as higher prices of certain consumer and intermediate goods continued to drive import expenditure. Among the intermediate goods imports, expenditure on textiles and clothing imports made a significant contribution towards the growth in import expenditure in June 2011 due to increased volume as well as prices.

The average import price of crude oil increased by 43.9 percent to US dollars 111.21 per barrel in June 2011. With respect to the consumer imports, expenditure on food and beverages increased in June 2011 mainly due to the higher expenditure incurred on wheat and sugar. Expenditure on imports of non-food consumer goods also increased in June 2011, particularly, motor vehicles (US dollars 84 million). Expenditure on imports of investment goods increased by 66.0 percent year-on-year, owing to higher imports of machinery and equipment.

During June 2011, workers’ remittances increased by 17.3 percent to US$ 404 million over the same month of 2010. Cumulative inflows on account of workers’ remittances amounted to US dollars 2,507 million during the first six months of 2011.

Earnings from tourism grew at a healthy rate of 50.9 percent to US dollars 370 million during the first six months of the year while total foreign inflows to the government during the same period amounted to around US$ 1.4 billion.

As per the provisional estimates, gross official reserves, without Asian Clearing Union (ACU) balances, increased significantly to US$ 8.1 billion by end July 2011, mainly due to the receipt of proceeds of the fourth International Sovereign Bond of US dollars 1 billion.