Responding to the policy measures taken in the first quarter of 2012, trade deficit decelerated further in May 2012, having narrowed in the previous three months. It recorded the lowest increase in 18 months, in May 2012, increasing moderately by 2.1 %, year on year, data released from the Central Bank showed.
According to the results, expenditure on imports continued to decline in May 2012 which amounted to US dollars 1,575 million, thus recording a year on year decline of 6.4 % while the earnings from exports, driven largely by lower international market prices for several major export items, recorded a year on year decline of 15.1 % and amounted to US dollars 710 million in May 2012.
Expenditure on imports declined in May 2012 due to reduced expenditure on both intermediate and consumer goods imports which declined 10% and 11% respectively. The decline in expenditure on intermediate goods imports was mainly due to the decline in crude oil imports by 51 % reflecting lower volumes of imports and the marginal decline in crude oil prices.
With respect to earnings from exports, declining global prices of some major commodities mainly contributed to the lower earnings from industrial exports which recorded a decline of 16.2 % in May 2012.
In cumulative terms, expenditure on imports in the first five months of 2012 grew moderately by 7.8 %to US dollars 8,208 million. This reflected a 20.3 % increase in expenditure on petroleum imports and a 34.6 % increase in expenditure on investment goods imports. Earnings from exports during this period declined by 5.4 % reflecting a 4.9 % decline in earnings from textiles and garments exports and a decline of 10.8 % in earnings from tea exports.
As a result the trade gap was expanded by 24.7% to 4,184.2 million in the first five months ending May