Earnings from merchandise exports in December 2021 grew 19.9 percent compared to December 2020 to reach US dollars 1,156 million, a media communiqué by the Central Bank stated on Friday, February 11.
Increases in earnings were observed across all main categories, while industrial exports mainly contributed to the expansion.
Cumulative export earnings, according to the bank increased by 24.4 percent to US dollars 12,502 million in 2021 compared to US dollars 10,047 million in 2020.
This is the highest ever export earnings for a year recorded in history compared to the previous highest export earnings of US dollars 11,940 million in 2019.
However, the trade deficit in the trade account widened in December compared to a year earlier, mainly due to an excessive surge in imports recording the highest ever monthly import expenditure, despite persistently high earnings from exports that exceeded US dollars 1.0 billion for the seventh consecutive month, last year. The trade deficit widened notably, driven by the considerable increase in imports that outpaced the growth in exports.
Tourist arrivals continued the growth momentum in December with a notable increase compared to the previous month. Workers’ remittances recorded a month-on-month growth in December 2021, mainly reflecting the response to the incentive schemes introduced for remittances and the seasonal increase.
The weighted average spot exchange rate in the interbank market continued to hover around Rs. 201 per US dollar during the month.
The deficit in the trade account widened to the highest ever monthly value of US dollars 1,085 million in December last year, compared to the deficit of US dollars 562 million in December 2020.
The cumulative deficit in the trade account in 2021 also widened to US dollars 8,136 million from US dollars 6,008 million in 2020. The ratio of the price of exports to the price of imports, improved by 4.6 percent in December 2021, compared to December 2020, as the increase in export prices surpassed the increase in import prices. The terms of trade for 2021 deteriorated by 7.8 percent compared to the previous year.