Exports reach new peak

Trade deficit shrinks by a massive 40%.

ISLAMABAD:

Pakistan made use of favourable terms of trade, making another record by exporting goods worth $2.5 billion in March, achieving growth of more than 41 per cent.

The country exported goods worth $2.5 billion in March, $727 million more than exports in the corresponding month last year, according to data released by the Federal Bureau of Statistics on Saturday. The March figure, the best milestone in history, breaks the two-month-old record of $2.32 billion exports witnessed in January 2011.

The country’s imports rose almost four per cent to $3.4 billion during the month in review – $130 million more than the imports posted in the same month last year.

“This is the highest and most remarkable monthly record,” said Trade Development Authority of Pakistan Chief Executive Officer Tariq Puri.

He warned that the downside risk in the coming months may be rising petroleum products prices in the international market, which can widen the trade deficit as the country imports more than 85 per cent of its oil. Puri added that although major contribution came from textile and clothing exports, non-traditional sectors such as marble, chilled meat, and value-added petroleum products also helped achieve the record export figure.

Trade gap shrinks

Unprecedented exports also shrunk the gap between exports and imports by almost 40 per cent. The trade deficit stood at $920 million, compared with last year’s deficit of $1.5 billion.

Independent economists have warned the government that domestic fiscal problems may appear at the external front within a year. However, the healthy trend has so far checked the current account deficit-gap between total external receipts and expenditures. On the domestic front, the government remains unable to tap revenues, causing larger budget deficits. Notwithstanding, authorities are under pressure to provide subsidies on fuel and electricity.

Cumulative numbers

Overall, in the first nine months (July-March) of the current fiscal year, Pakistan’s trade deficit rose to $11.3 billion, 1.7 per cent more than the deficit in the same period of the preceding year. The gap is still much below the initial estimates, as the government had estimated trade deficit at $18 billion that was revised downward to $13 billion later.

Pakistan’s exports stood at $17.8 billion during the July-March period, $3.7 billion or one-fourth more than the preceding year’s exports. Imports during this period stood slightly over $29 billion, showing a growth of 15.6 per cent over imports last year. In absolute terms, Pakistan’s imports increased $3.9 billion during the nine months.

Authorities are expecting $24 billion worth of exports by end of this financial year, almost $3 billion more than initial estimates.

Compared with February, exports grew 15.7 per cent or $339 million in March. Imports in March increased 11.9 per cent or $364 million. The trade deficit in March widened marginally to 2.8 per cent.



Published in The Express Tribune, April 10^th, 2011.