Imports drop to lowest in a decade as demand slumps
Photo: Bloomberg News
Thursday October 22 2009
Imports plunged 25pc in August from a year earlier to the lowest in more than a decade as domestic demand slumped.
Exports fell 10pc and the August seasonally adjusted trade surplus widened to €2.95bn from €2.46bn, the Central Statistics Office (CSO) in Cork said today.
Rising unemployment and tax increases have curbed spending, particularly on big-ticket items such as cars. In the seven months through July, the latest month for which details are available, imports of road vehicles fell 79pc on the year.
“The import demands of the domestic economy have fallen rapidly as consumers increase their savings,” said Ronnie O’Toole, chief economist at National Irish Bank.
The drop may lead to a record trade surplus of more than €40bn this year, he said.
The January-July data show that exports rose 2pc compared with a year earlier, boosted by sales of chemical and pharmaceutical products.
Exports of food dropped 13pc, partly due the weakness of the pound against the euro, which has reduced the competitiveness of Irish goods in the UK.
“The broad-based weakness outside of the chemicals sector has persisted in the past few months, with ‘indigenous’ exports badly hit by demand from the UK, due to the combination of the deep recession in Britain and sterling’s continued weakness,” said Alan McQuaid, chief economist at Bloxham Stockbrokers in Dublin.
- Fergal O’Brien
© Bloomberg
