Trade deficit narrows 9.4% during July-May

Published: June 12, 2010
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Data indicates that the gap may widen in the coming months.

Data indicates that the gap may widen in the coming months.

ISLAMABAD: The trade deficit narrowed 9.4 per cent during July-May of the current financial year on the back of a continuous pick-up in exports and a marginal growth in imports.

However, latest trade data indicates that the trend may reverse and the gap may widen in coming months.

The deficit shrank to $13.9 billion in the first 11 months of fiscal year 2010 from $15.3 billion a year ago, according to figures released by the Federal Bureau of Statistics (FBS) on Friday.

Exports stood at $17.6 billion, which were $1.4 billion or 8.9 per cent more than the corresponding period of the last financial year.

Imports were valued at $31.485 billion, 0.01 per cent or just $3.2 million more than the imports in the same period last year, but importantly the negative growth of imports has come to a halt.

The trade figures have surpassed the International Monetary Fund’s (IMF) estimates. The IMF had expected imports to be around $31 billion for the current fiscal year, which has already been crossed while June’s data is yet to come.

The IMF had estimated exports at $18.5 billion but the healthy trend shows that exports may reach near $19.5 billion.

However, the trade gap may start increasing instead of shrinking in the next fiscal year beginning July, indicated by a sharp rise in the deficit in May.

The trade deficit surged 46 per cent or $511 million to $1.6 billion in May against the same month last year.

Exports increased by 19.9 per cent to $1.8 billion in May compared to the corresponding month a year ago when exports were worth $1.5 billion, according to the statistics.

Imports increased 33 per cent in May over a year ago. Last month, Pakistan imported $3.4 billion worth of goods compared to imports of $2.6 billion in May 2009.

In May, the trade deficit was $1.6 billion or around 26 per cent more than April. Exports marginally increased by one per cent to $1.75 billion in May compared to $1.73 billion in April.

Imports in May rose 31 per cent against April. The country imported goods worth $3.4 billion against April imports of $2.6 billion.

Published in the Express Tribune, June 12th, 2010.

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Reader Comments (1)

  • Meekal Ahmed
    Jun 12, 2010 - 11:19PM

    This is good news. But the exports side could be all a price effect.

    Looking ahead of course imports will rise if the economy continues to gather strength. The key is to foster stronger export growth (no new policies or initiatives that I have heard of and with inflation still so high the nominal exchange rate is probably appreciating) while ensuring that imports stay broadly in line with the growth of domestic demand. Recommend

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