Trade gap narrows as exports rally

Financial position comfortable despite blockade of IMF loan.

ISLAMABAD:

Pakistan’s trade deficit narrowed to $12.1 billion in the first 10 months of the current financial year due to strong growth in exports, helping to maintain foreign currency reserves and averting rupee depreciation against the US dollar.

Exports raced away and recorded a growth which was more than double the growth in imports, data shows.

Trade deficit – the gap between exports and imports – fell 1.94 per cent to $12.1 billion during July 2010 to April 2011 against $12.34 billion in the corresponding period of last year, said the office of the Federal Bureau of Statistics (FBS) on Tuesday.

The 10-month figures show that the country’s external financial position is comfortable despite the suspension of International Monetary Fund’s loan programme, which is meant for bridging the trade gap.

Latest assessments show that the trade deficit may not exceed $15 billion by June, which is $3 billion less than the original estimates of the commerce ministry. Government officials are expecting exports worth $24 billion by the end of this financial year, almost $3 billion more than initial estimates.

This will stabilise the rupee that is trading at more than 84 to the US dollar. Foreign exchange reserves also remain above $17 billion.

Exports to the rest of the world jumped 27.8 per cent, crossing the psychological benchmark to stand at $20.2 billion during the period under review.

Total imports during this period registered a growth of 14.7 per cent to $32.3 billion. In absolute terms, imports increased $4.2 billion during the first 10 months of the current fiscal year.

Trade falls on monthly basis

Monthly trade statistics show that the momentum built on favourable international trade terms may not continue in the coming months.

Exports dipped 4.8 per cent in April compared with March while Imports also dipped shrank by around five per.

The trade deficit in April over March narrowed 5.5 per cent and stood at $870 million.

Published in The Express Tribune, May 11^th, 2011.