GOVERNMENT figures yesterday revealed a growing visible trade deficit in the first two months of the year. Import volumes grew by about 22 per cent, about four per cent higher than combined domestic and re-exports. The cost of total exports increased 4.9 per cent while imports jumped by 5.2 per cent. The figures, which cover the Lunar New Year holiday, have been superseded by first quarter statistics which revealed a $36 billion blow-out in the visible trade account during the first quarter. Graham Neilson, an economist at Asia Equity, said: 'The first three months were pretty bad. The effect of a weakening US dollar - to which the Hong Kong dollar is pegged - has exacerbated the cost of imports for infrastructure development and retained imports. This is making the deficit significantly wider than expected.' The full impact of the greenback slump should become more evident over the next few months. The cost of goods used in production processes recorded year-on-year increases during February, with raw material and semi-manufactures up eight per cent and and fuels 3.3 per cent. Rising costs of materials were reflected in higher year-on-year re-export prices. Economists have attributed the widening visible trade deficit to a rapid rise in the volume of retained imports, a deterioration in the terms of trade and a change in the trade pattern between China and Hong Kong. They claim that the falling dollar will keep pressure on the trade balance but believe adjustments in the trade volumes should help to contain the deficit.