Trade gap widens for fourth consecutive month in June

• June trade deficit rose to US $ 652mn, compared to US $ 161mn a year ago• Merchandise import expenditure grew by 57.2% YoY to US $ 1.66b; merchandise export earnings recovered 12.6% to US $ 1.01b• 1H cumulative deficit widened to US $ 4.32bn, from US $ 3.26bn in 2020• Largest contributor to deficit widening in 1H was US $ 543.8mn increase in fuel import bill

The trade deficit continued to widen for the fourth consecutive month in June on a year-on-year (YoY) basis, as imports grew at a faster pace, driven by consumer and investment goods, surpassing the preCOVID levels, despite a decline in the fuel import bill and import restrictions in place.

In June, the trade deficit rose to US $652 million, compared to the US $ 161 million deficit recorded one year ago, as the expenditure on merchandise imports grew by a record 57.2 percent YoY to US $ 1.66 billion, while the earnings from merchandise exports recovered 12.6 percent YoY to US $ 1.01 billion in the month.

“Both exports and imports were significantly higher in June 2021, compared to June 2020. Considering the first half of the year, although exports recorded healthy growth, import expenditure increased at a higher pace,” the Central Bank (CB) noted.

The cumulative deficit in the trade account in the first half of the year widened to US $ 4.32 billion, from US $ 3.26 billion reported over the same period in 2020 and from US $ 3.6 billion recorded in the corresponding period in 2019. The high import prices also contributed to the deterioration in the trade account in June. Terms of trade, i.e. the ratio of the price of exports to the price of imports, deteriorated by 16.7 percent YoY in June.