One of the priorities of economic management is to reduce the dominant weight of consumption in the growth composition, which has recently turned into “consumption-led growth”. This has been stated in official texts and speeches on various occasions, and actual steps have been taken in line with the rhetoric.
One of the consequences of consumption-led growth is the rapid rise in imports and the current account deficit. Indeed, we have seen this clearly in the monthly data. However, there have been signs of a decline in imports in recent months. In August and September, imports were below the previous year’s level. When the October data are released, we will probably see that the decline in imports continues.
However, foreign trade indicators suggest that there was actually no decline in imports in quantity terms and that the fall in the import bill was driven by price declines.
The import quantity index has declined only once in the last 12 months. In August, the most recent data available, imports increased by 11 percent year-on-year. We will find out this week what the situation is with the quantity index in September. Foreign trade data show that imports in September were down 14.1 percent year-on-year, which translates into a decline of about USD 4.5 billion, with energy, gold and metals leading the decline.
Contrary to the amount of imports, there is a serious decline in prices. Import unit prices are 16 percent below last year’s level. While the amount of goods we import continues to increase, the total import bill has started to come down as the unit prices we pay have fallen. The decline in energy and metal prices has a significant share in the decline in import prices.
Therefore, we are not talking about a structural decline in imports, but a price-driven cyclical decline. This means that the current account deficit, which we will see declining in the remaining months of the year, could easily rise again with an external shock that would push global prices up. But at the moment, the possibility of such an external impact is very weak.