Trade deficit increases four percent
The trade deficit, the resultant of exports of goods minus imports, widened four percent last year, reaching $15.7 billion, according to the Customs.
The deficit increase was triggered by a growth in imports (3.5 percent) higher than that of exports (0.8 percent). ‘Real exports,’ which excludes mineral products (oil transferred to Syria) and precious stones, dropped 14 percent.
Alia Abbas, Director General at the Ministry of Economy and Trade, said: “Production didn’t rise in parallel with consumption emanating from Syrian refugees. This led to an increase in imports.” She said that many manufacturers aren’t able to compete with some imported products due to high energy and other costs.
Marwan Barakat, Head of Research at Bank Audi, said: “The economic activity last year recorded some improvements and an increase in consumption which led to a growth in imports. On the other hand, exports remained stable due to the insecurity of transport lines through Syria.”
The trade deficit has been weighing heavily on the Balance of Payments (BoP) indicator, which has recorded consecutive yearly deficits since 2010. The trade balance reached a record deficit of $3.3 billion in 2015. The Central Bank intervened with a complex financial engineering operation to shore up the BoP to a $1.3 billion surplus, halting the downward spiral in that indicator.
The top five export destinations are South Africa ($628 million), Saudi Arabia ($267 million), United Arab Emirates ($239 million), Syria ($199 million), and Iraq ($162 million). South Africa is mainly the recipient of pearls and precious stones. “These products are exported to South Africa and through it to other countries,” said Abbas. Exports to Turkey are $72 million, and $62 million to Germany.
China remains the first source of imports, at $2.1 billion in merchandise value. This is followed by Italy ($1.4 billion), the United States ($1.2 billion), Germany ($1.2 billion), Greece ($1.1 billion), Egypt ($773 million), and France ($715 million).
Gold and precious stones rank first in exports ($828 million), followed by food and beverage industries ($445 million), and machinery and electrical instruments ($334 million).
Mineral products (oil derivatives) rank first in imports ($3.7 billion), followed by products of chemical industries ($2 billion), and machinery and electrical instruments ($1.9 billion).
Exports of agricultural products reached $203 million. Imports exceeded $1.7 billion.
Date Posted: Feb 07, 2017