Despite the fall in industrial production in recent months, export earnings grew by 11.1% in local-currency terms to TD8.1bn (US$5.9bn) in the first four months of 2011, compared with the same period of 2010. Exports of mechanical and electrical goods grew by 25.4% to TD3.1bn, exports of textiles by 10.4% to almost TD2.2bn, food exports by 18% to TD739m and energy exports by 4.6% to TD1.1bn. Imports in the first four months rose by 5.1% in value to TD10.5bn, compared with the same period of 2010 amid weak consumer demand and poor business confidence. Imports of mechanical and electrical goods fell by 3% to TD4.4bn as businesses held back from capital investment. However, energy imports increased in value by 22% to TD1.5bn, as a result of rising global oil prices, while food imports rose by 35% to TD1.3bn following the poor harvest in 2010 and higher world food prices.

Although the merchandise trade deficit in the first four months narrowed by 11% to TD2.4bn, other external income streams continued to deteriorate. Tourism receipts fell by 49% to TD486m in the year to May 20th while remittances in the same period fell by 9% to TD691m. Weakening external income and growing external expenditure, including the increased cost of debt servicing, have widened the current-account deficit, which reached TD1.5bn at the end of May. Part of the current-account deficit will be financed by foreign direct investment (FDI) inflows, but FDI fell in the first four months of 2011 by 25% to TD424m compared with the same period of 2010. A large part of the deficit will also be financed by foreign aid and concessional loans.

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