Export earnings increase in March

Earnings from exports increased by 7.8 per cent, year-on-year, to US dollars 680 million. Agricultural exports, which grew by 29.1 per cent, year-on-year, largely contributed to this growth, with earnings from both tea and minor agricultural products increasing significantly in March 2008, the Central Bank said. Industrial exports increased by 3.0 per cent, year-on-year, along with an 8.2 per cent growth in exports of textiles and garments.

Apart from textiles and garments, rubber products; and machinery and equipment, were among the other industrial exports, which have contributed significantly to the growth in exports in March 2008. Cumulative exports during January-March 2008 amounted to US dollars 1,878 million, having increased by 10.2 per cent, year-on-year.

Expenditure on imports recorded an increase of 32.5 per cent, year-on-year, in March 2008, and amounted to US dollars 1,130 million. Imports of consumer goods grew by 37.1 per cent, year-on-year, with large increases being recorded in respect of several categories of food imports, namely, rice, milk products and wheat.

The surge in the price of petroleum, which increased by 70 per cent to US dollars 100.6 per barrel, led the expenditure on petroleum to contribute more than half of the growth of imports in March 2008.

Imports of investment goods increased by 6.2 per cent, year-on-year, in March 2008, primarily driven by an increase in the import of building materials. Cumulative imports during January-March 2008 amounted to US dollars 3,265 million, which is an increase of 37.6 per cent from the corresponding period last year.

The developments in external trade resulted in the deficit in the trade balance widening from US dollars 222 million in March 2007 to US dollars 449 million in March 2008. The cumulative deficit in the trade balance for January-March 2008 was US dollars 1,386 million, compared to US dollars 669 million for the corresponding period last year.

However, the negative impact of the trade deficit on the current account was mitigated by worker remittances, which amounted to US dollars 752 million for the quarter ending March 2008.

The overall balance of payments recorded a surplus of US dollars 416 million for the period January-March 2008, resulting in the gross official reserves increasing to US dollars 3,518.6 million by end March 2008, which is sufficient to finance around 3.5 months of imports.