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Price hikes widen trade gap

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Rising prices of raw materials in Cyprus are largely to blame for a growing trade deficit, wider by almost 20% in January, compared to the same month last year, according to stakeholders.

The trade deficit, as announced by the statistical service Cystat, increased by 19.4% in January compared to the same month in 2021, rising to €518.72 mln, from €434.34 mln, despite an increase in the value of both exports and imports.

Exports rose (from EU member states and from third countries) by 31% to €205.2 mln compared to €156.3 mln in January 2021, while imports surged 22.6% to €724 mln.

Asked to comment on the increase in the island’s trade deficit in January, the general secretary of the Cyprus Chamber of Commerce and Industry, Marios Tsiakkis, said this was because of rising prices internationally.

Tsiakkis explained that prices of goods have been pushed up due to high demand of raw materials, as economies reopen following relaxations of COVID-19 restrictions around the world.

The business chamber’s general manager explained that, “stakeholders expect to see the trade deficit grow further if a surge in petrol prices is not brought to a halt”.

The war in Ukraine is currently pushing fuel prices up as Russia’s energy resources have been pulled from the market due to sanctions. On Sunday, the price of crude oil had reached 135 dollars a barrel, but has since fallen to just above 100 dollars on Thursday.

Meanwhile, according to final data on Cyprus foreign trade for December 2021, the total imports of goods and the exports for domestically produced goods decreased, while the exports of foreign products increased.

2021 trade deficit grows

For the whole of 2021, the Cyprus trade deficit grew to €5.24 bln, from €4.89 bln in 2020.

Total imports of goods amounted to €703.6 mln in December 2021 as compared to €713.5 million in December 2020, a decrease of 1.4%.

Total imports of goods in January this year were worth some €724 mln, compared to €590.6 mln in January 2021, recording an increase of 22.6%.

Imports from other EU member states in January were €498.8 mln and from third countries €225.1 mln, compared to €368.9 mln and €221.7 mln, respectively, in January 2021.

Exports to other EU member states in January 2022 were €70.6 mln and to third countries at €134.6 mln, compared to €64.6 mln and €91.6 mln, respectively, in January 2021.

Exports of domestically produced goods, including stores and provisions, in December 2021 were €100.1 mln as compared to €107.4 mln in December 2020, a decrease of 6.8%.

Domestic exports of industrial products in December 2021 were €91.3 mln compared to €98.9 mln in December 2020, whilst domestic exports of agricultural products in December 2021 were €6.9 mln compared to €6.2 mln in December 2020.

Exports of foreign products, including stores and provisions, in December 2021 were €232.3 mln as compared to €83.1 mln in December 2020, an increase of 179.5%.