Double trouble: Exports tumble 10%, imports swell 20% in November

Commerce ministry to conduct a study to review the situation.

ISLAMABAD:

In what appears to be double trouble for the country’s trade, exports tumbled 10 per cent while imports grew almost 20 per cent, widening the deficit by 55.5 per cent in November against the same period last year, according to figures released by the Federal Bureau of Statistics (FBS) on Friday.

Government officials and analysts attribute the worsening of trade indicators to the deepening debt crisis in Europe, which is the largest trading partner of the country.

Export bill amounted to $1.6 billion in November, $173 million less than the exports made in November last year, FBS data shows. On the other end, import bill increased by 19.4 per cent in the same month as the country paid $3.7 billion, which was $604 million more than the bill paid in the corresponding period last year.

Hence, the trade deficit widened by 55.5% to $2.2 billion compared with the deficit in the same month last year, FBS reported.

Exports fell for the second consecutive month while it stood below the $2 billion mark for the fourth straight month in November. The numbers do not to match the healthy picture of the external account estimated by the finance ministry and the State Bank of Pakistan in a joint report.

Till recently, Pakistan’s external account remained stable because of a healthy growth in exports and remittances despite suspension of external loans. However, the country’s foreign exchange reserves in the last one week alone depleted by $296 million to $16.6 billion.

“The government was expecting the decline in exports due to the debt crisis in Europe coupled with the deteriorating law and order in Karachi,” Commerce Secretary Zafar Mahmood told The Express Tribune. He said the ministry would conduct a study to review the situation. Mahmood further said that Pakistan was exploring Far East Asian and South Asian markets to compensate losses suffering the country due to dip in demand in Europe.

The government recently re-adjusted trade projections downwards. It estimated that exports would grow by 3 per cent against earlier estimates of 5 per cent while imports would grow 13 per cent. The current account deficit – gap between external payments and receipts – is projected at $2.9 billion. However, the International Monetary Fund’s assessment shows the deficit at $ 3.9 billion.

Aggregate trade data

During the first five months of the current fiscal year (July-November), trade deficit widened 36.7% or $2.5billion to $9.1 billion, than the corresponding period last year, FBS reported. Imports grew 20.2 per cent and stood at $18.5 billion, which were $3.1 billion more than the imports in the corresponding period of the last fiscal year. Exports during this period stood at $9.4 billion which were $666 million or 7.7 per cent more than the corresponding period of the last year.

On a monthly basis, exports dropped 18.2 per cent in November against the preceding month. The statistics show earnings from exports fall to $1.6 billion in November against $1.9 billion in October. Imports marginally grew to $3.7 billion, 3.4 per cent higher than October when the country imported $3.6 billion goods. Meanwhile, monthly trade deficit widened to 27.3 per cent in November over October.

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