Industrial sector leads export growth in July

Both earnings from exports and expenditure on imports grew further on a year-on-year basis in July 2011. Earnings from exports reached a level of US dollars 958 million in July 2011.

Reflecting high base of exports in July 2010, earnings from exports grew by 9.4 per cent in July 2011, while expenditure on imports increased by 58.2 per cent to US dollars 1,777 million.

During the first seven months of 2011, the cumulative earnings from exports and expenditure on imports have increased by 30.3 per cent to US dollars 6,014 million and 48.3 per cent to US dollars 11,091 million, respectively.

As a result the trade deficit expanded to US dollars 5,077 million, the Central Bank said yesterday.

The largest contribution to the growth in exports in July was from the industrial sector, led by a significant increase in exports of machinery and equipment, diamond and jewellery and textiles and garments. Earnings from exports of machinery and equipment increased by 88.6 per cent to US dollars 85 million in July 2011.

This comprised mainly cruise ship, transformers, static converters, inductors, circuits and insulated cables.

Exports of diamond and jewellery increased by 87.5 per cent to US dollars 45 million, year-on-year while earnings from textiles and garments increased by 5.0 per cent to US dollars 385 million in July 2011 recording the highest monthly value.

Agricultural exports, which accounted for 21.5 per cent of export earnings in July 2011, decreased by 3.6 per cent to US dollars 205 million, mainly due to lower value and volume of tea exports. Earnings from rubber exports increased substantially while higher prices fetched by minor agricultural exports supported higher exports in the category.

All major categories of imports increased in July 2011, reflecting higher domestic demand. The largest contribution to the overall increase was from intermediate goods (56.1 per cent), followed by investment goods (25.5 per cent). Expenditure on imports of intermediate goods increased by 58.0 per cent to US dollars 999 million led by significant increases in petroleum and fertilizer imports in July 2011.

The average import price of crude oil stood at US dollars 112.85 per barrel in July 2011 compared to US dollars 73.53 per barrel in July 2010.

Expenditure on imports of fertilizer increased to US dollars 54 million in July 2011 due to higher import volumes and higher price.

Imports of investment goods increased by 62.1 per cent to US dollars 384 million in July 2011, led by higher expenditure on imports of machinery and equipment (US dollars 178 million) and building materials (US dollars 105 million).

Imports of consumer goods increased by 39.1 per cent in July 2011 led by non-food consumer goods, particularly, motor vehicles (US dollars 87 million), while food and beverages imports increased by 22.9 per cent with a higher contribution from wheat in July 2011, the Central Bank said.