Cyprus exports leap 22.1% in 2011

**Trade deficit shrinks by 9.7% **

In a little piece of good news for the Cyprus economy the trade deficit shrank by 9.7% in 2011, according to preliminary figures for December, thanks to a combination of strong export growth and weak domestic demand.
In 2011 the trade deficit shrank by 9.7% of EUR 523,202 to an estimated EUR 4,857,421 (EUR 4.89 bln), from EUR 5,380,623 (EUR 5.38 bln) in 2010.
One reason was a 22.1% rise in exports to a preliminary EUR 1.39 bln from EUR 1.14 bln in 2010.
Exports were buoyed in 2011 by a strong performance from the mainstays, pharmaceuticals, halloumi cheese and raw potatoes.
However, given the strong weighting of imports, weak domestic demand also played its part.
Imports fell in 2011 by 4.2% to a preliminary EUR 6.25 mln, from EUR 6.52 mln in 2010 despite a strong increase in the value of oil imports as international prices rose.
On the basis of data for January-September the main reason appears to be a small drop in consumer goods but a stepper contraction in demand for capital goods and transport equipment—the latter having been boosted in 2010 by the import of aircraft.
Revised figures for November paint a similar picture.
Total imports/arrivals in January-November 2011 reached to EUR 5,726.2mln compared with EUR 5,963.4mln in January-November 2010.
Total exports/dispatches in January-November 2011 amounted to EUR 1,273.8mln compared with EUR 1,032.3mln in January-November 2010.
The trade deficit shrank to EUR 4,452.5mln in January-November 2011 compared with EUR 4,931.0mln in the corresponding period of 2010.
Total imports comprise imports from third countries and arrivals from other member states, while total exports comprise exports to third countries and dispatches to other member states.

Fiona Mullen
www.sapientaeconomics.com