Rising commodity prices in Cyprus are largely to blame for the growing trade deficit, which increased by almost 349 million euros in 2021 compared to 2020 to reach 5.24 billion euros.
Despite the higher growth rate of Cypriot exports compared to imports, the island’s trade deficit widened due to the rising cost of imports.
According to the statistics service (CyStat), the trade deficit for the period from January to December 2021 amounted to 5.24 billion euros, compared with 4.9 billion euros in the corresponding period of 2020.
In particular, the total volume of imports of goods from EU member states and third countries in 2021 amounted to 8.53 billion euros, compared to 7.64 billion euros in 2020, an increase of 11.6%.
Total merchandise exports in 2021 amounted to 3.28 billion euros compared to 2.74 billion euros in 2020, an increase of 19.7%.
The EU was the main source of goods supplied to Cyprus, accounting for 5.52 billion euros of total imports, while imports from other European countries reached 659 million euros. Imports from the rest of the world amounted to 2.35 billion euros.
Exports to the EU amounted to 874.8 million euros, while exports to other European countries amounted to 411.4 million euros. Exports to the rest of the world amounted to just over 2 billion euros.
Asked to comment on the increase in the island’s trade deficit in January, Marios Tsiakkis, secretary general of the Cyprus Chamber of Commerce and Industry, said it was due to rising international prices. Tsiakkis explained that commodity prices have risen due to strong demand for raw materials as economies reopen following the easing of COVID-19 restrictions around the world.
The CEO of the business chamber explained that “stakeholders expect the trade deficit to widen further if the rise in gasoline prices is not halted.”
The war in Ukraine is currently pushing fuel prices up as Russian energy has been taken off the market due to sanctions. The price of crude oil has been on a rollercoaster ride in recent weeks, hitting $140 a barrel, but has since dropped to just over $100.
On Thursday, it rose to $120 due to a severe cut in production caused by damage at the Kazakh terminal of CPC, due to which up to 1 million barrels of crude oil per day could be taken off the market.