Trade deficit nears record levels

Continued downward trend of exports leading to near record level of trade deficit.

illustrative-ship imports exports 311aj (photo credit: Ariel Jerozolimski)
illustrative-ship imports exports 311aj
(photo credit: Ariel Jerozolimski)
The trade deficit approached record levels in January as exports continued the downward trend that began in the second half of last year, the Treasury said Monday in its monthly report on the economy.
Export of goods (excluding ships, planes and diamonds) dropped 6.3 percent in dollar terms in January, and export of services dropped 0.8% in December, according to the report. In contrast, imports rose 12.2%.
Tourism and chemicals were two of the industries hardest hit by the drop in exports. Tourism revenue began to decrease in January, while export of pharmaceutical products dropped sharply. On the import side, purchases of investment products and raw materials increased significantly.
The report also noted that public sentiment deteriorated in January, citing the fall in the Purchasing Managers Index, which it said had reached levels not seen since the 2008 global financial crisis. Poor purchasing managers’ sentiment is usually an indicator that industry activity is about to contract, the report warned.
On a more positive note, the report referred to recently published Central Bureau of Statistics data that showed labor-force participation remained steady at 57.4%, and the unemployment rate dropped to 5.4%. The economy grew at a rate of 3.2% in the fourth quarter, it noted.
Tax revenues were higher than usual in January, thanks to the one-time collection of taxes from dividends of shareholders, the report said. Collection of direct taxes increased overall, but it was offset slightly by reduced collection of indirect tax revenues.