Trade deficit down by 14.7% over previous month

Federal Bureau of Statistics reported that trade deficit shrank to $1.23 billion.

ISLAMABAD: Pakistan’s trade deficit narrowed by 14.7 per cent in August as compared to July as both imports and exports decreased in the aftermath of floods.

The office of the Federal Bureau of Statistics reported that trade deficit, which is the gap between exports and imports, shrank to $1.23 billion in August. In July, the deficit was $1.45 billion.

Pakistan’s exports to the rest of the world stood at $1.77 billion in August, which was $16 million or 0.9 per cent less than the exports in July. Imports in August fell to $3.01 billion, a dip of $228 million or 7.06 per cent compared to imports in July.

Notably, more than two months of the new financial year 2010-11 have passed and the government is yet to announce a trade policy.

Reports suggest that the government is likely to set export target at $21.3 billion, a projected growth of 10 per cent over last year. For fiscal year 2009-2010, exports were registered at $19.3 billion. This year’s imports are likely to remain around $39 billion. Last year’s imports were registered at $34.7 billion.

The trade deficit widened by 20.2 per cent during the first two months (July-August) of the current financial year compared to the corresponding period of the last fiscal year. The trade deficit was recorded at $2.7 billion, an increase of $452 million or 20.2 per cent over last year’s corresponding deficit.

During July and August, Pakistan’s exports to the rest of the world registered at $3.6 billion, showing a growth of 21.5 per cent over the last year. Exports for the same period last year were registered at $2.9 billion.

Imports during the last two months have also increased by almost 21 per cent as compared to last year’s imports for the same period. In July and August, Pakistan imported goods worth $6.3 billion, while imports of $5.2 billion were registered during the first two months of the last fiscal year.

On a yearly basis, the trade deficit has widened significantly. After August of this year the trade deficit was recorded at $1.3 billion, which was 16.2 per cent more than the deficit of August 2009. In August 2009 the trade deficit remained at $1.06 billion.

Published in The Express Tribune, September 10^th, 2010.