Friday, October 11, 2024

IMPORTS AND EXPORTS DOWN IN FIRST 8 MONTHS OF 2024

 Filenews 11 October 2024 - by Angelos Angelodimou



The result of the effort to reduce inflation seems to be the reduction of the trade deficit in Cyprus.

The data of the Statistical Service for the period January – August regarding the trade balance showed a significant decrease in imports and at the same time a noticeable decrease in exports, which resulted in a reduction in the deficit.

According to statistical data, the trade deficit for the period January – August stood at €4.98 billion, showing a decrease of 18.5%, compared to €6.12 billion. in the same period last year. Specifically, total imports of goods for the period January-August 2024 were €7.577.7 million, compared to €8.968.7 million. for the period January-August 2023, recording a decrease of 15.5%.

At the same time, total exports of goods for the period January-August 2024 were €2.589.8 million, compared to €2.845.2 million for the corresponding period of 2023, recording a decrease of 9.0%.

Inflation and demand

As shown by the data, there was a fairly large decrease in imports for the period January – August, of 15.5% and a noticeable decrease in exports, of 9%.

Asked by "F" to explain the specific fact, namely the simultaneous decrease in imports and exports, economist Yiannis Telonis referred to three possible causes.

The main scenario is that imports fell as a result of the effort to reduce inflation. The high prices, he noted, led to a reduction in demand and therefore a fall in inflation, but also resulted in a reduction in imports and therefore the deficit in the balance.

– A second scenario, which, however, does not gather many possibilities, is that there was enough stock in the companies' warehouses, so that they did not proceed with new imports during the reporting period. However, for the most part, businesses have around 30 parts of stock, so it's not likely that they would hold inventory for longer.

– Third, there may have been more subdued economic activity, resulting in reduced work and therefore the need to import raw materials or products.

Circumstances for exports

Regarding exports, Telonis noted that there has been no structural change in the economy, indicating that there is a serious problem with exports. As he said, we will have to wait and see how the whole year ends, so that we can draw safe conclusions. Possibly, he added, some conjunctural factors played a role in the decline in exports, such as weather conditions, especially in terms of food, but also the disputes over halloumi, which may have affected somewhat the part of exports for this product.

According to the data of the Statistical Service, the numbers regarding imports and exports in 2024 compared to 2023 were during the last five months:

2024: In August, €948,583,000 were recorded in imports and 276,398,000 in exports. In July, 1,055,965,000 in imports and 327,116,000 in exports. In June, 901,868,000 in imports and 449,378,000 in exports. In May, 1,047,982,000 in imports and 340,793,000 in exports. In April 1,098,529,000 in imports and 350,750,000 in exports.

2023: In August, €1,243,104,000 in imports and 422,799,000 in exports. In July, 1,117,523,000 were recorded in imports and 395,606,000 in exports. In June, 1,076,567,000 in imports and 321,856,000 in exports. In May, 1,015,991,000 in imports and 423,444,000 in exports. Finally, in April 932,823,000 in imports and 324,630,000 in exports.