The value of merchandise imports dwarfs that of exports, and the country has historically run a wide deficit on its goods trade account. We expect the trade deficit to widen in 2023-24, inflated by high oil prices and continued reliance on imports for domestic construction projects. The strengthening of external demand over the forecast period and ongoing efforts to extend the country's shipments of fisheries (the main export commodity) to Russia and China will underpin a recovery in goods exports. This will nonetheless be overshadowed an import bill fuelled by tourism activity in the islands, the size of which will continue to exceed exports by a wide margin.

By contrast, services exports from tourism (accounting for 90% of total services credits) have consistently exceeded services debits. We expect the services balance to be in surplus over the forecast period, supported by firm tourism activity. The current account, however, will remain firmly in deficit in 2023-24, as the services surplus will be insufficient to offset the goods trade deficit.

The primary and secondary income accounts will remain in deficit during the forecast period, reflecting high interest payments and negligible remittance inflows.