Country sees sudden surge in imports
Goods worth $4.3b purchased in March, deficit widens.
The import bill for March was $962 million or 28.5% higher than imports worth $3.38 billion in February this year, according to figures released by the Pakistan Bureau of Statistics. PHOTO: FILE
ISLAMABAD:
Pakistan’s imports suddenly jumped to $4.3 billion in March after remaining steady at around $3.5 billion, indicating that dwindling foreign currency reserves of the country will cover slightly more than a month of imports.
The surge of approximately $1 billion in import bill has exposed the vulnerability on the external front, heightening concerns over meeting international financial obligations if the government remains undecided about the timing of a fresh bailout package from the International Monetary Fund.
The import bill for March was $962 million or 28.5% higher than imports worth $3.38 billion in February this year, according to figures released by the Pakistan Bureau of Statistics on Friday.
The double-digit growth in imports left a yawning trade gap of 42.8% in March over February as growth in exports could not match the growth in imports.
Exports in March stood at $2.13 billion, an increase of $299 million or 16.3% over February. Trade deficit widened to $2.2 billion against $1.5 billion in February.
According to the State Bank of Pakistan, net foreign currency reserves held by it dropped to $6.697 billion on April 5, including forward cover facility for imports. Though the central bank has not revealed the amount covered by forward contracts, market analysts say it is between $1.5 billion and $2.5 billion.
Excluding this, actual reserves held by the central bank stand much less than $5 billion, only sufficient to finance one month of imports.
Reserves held by commercial banks at $5.06 billion are in addition to the SBP’s reserves.
Experts believe the central bank may soon find itself in a catch-22 situation where it will be forced to resort to multitasking with limited reserves – help the market finance the import bill besides defending the exchange rate and keep servicing the country’s foreign debt.
The last PPP-led coalition government wasted months in debating whether the country needed another IMF programme and when.
According to minutes of the last Monetary and Fiscal Policies Coordination Board, Anwar opposed the bailout programme, but failed to suggest an alternative, said a board member who attended the meeting.
Data for nine months (July-March) of the current fiscal year showed that Pakistan’s trade deficit narrowed to $15.4 billion, a contraction of 4.9%. Against $18.1 billion worth of exports, the import bill stood at $33.4 billion in July-March 2012-13..
Published in The Express Tribune, April 13th, 2013.
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Pakistan’s imports suddenly jumped to $4.3 billion in March after remaining steady at around $3.5 billion, indicating that dwindling foreign currency reserves of the country will cover slightly more than a month of imports.
The surge of approximately $1 billion in import bill has exposed the vulnerability on the external front, heightening concerns over meeting international financial obligations if the government remains undecided about the timing of a fresh bailout package from the International Monetary Fund.
The import bill for March was $962 million or 28.5% higher than imports worth $3.38 billion in February this year, according to figures released by the Pakistan Bureau of Statistics on Friday.
The double-digit growth in imports left a yawning trade gap of 42.8% in March over February as growth in exports could not match the growth in imports.
Exports in March stood at $2.13 billion, an increase of $299 million or 16.3% over February. Trade deficit widened to $2.2 billion against $1.5 billion in February.
According to the State Bank of Pakistan, net foreign currency reserves held by it dropped to $6.697 billion on April 5, including forward cover facility for imports. Though the central bank has not revealed the amount covered by forward contracts, market analysts say it is between $1.5 billion and $2.5 billion.
Excluding this, actual reserves held by the central bank stand much less than $5 billion, only sufficient to finance one month of imports.
Reserves held by commercial banks at $5.06 billion are in addition to the SBP’s reserves.
Experts believe the central bank may soon find itself in a catch-22 situation where it will be forced to resort to multitasking with limited reserves – help the market finance the import bill besides defending the exchange rate and keep servicing the country’s foreign debt.
The last PPP-led coalition government wasted months in debating whether the country needed another IMF programme and when.
According to minutes of the last Monetary and Fiscal Policies Coordination Board, Anwar opposed the bailout programme, but failed to suggest an alternative, said a board member who attended the meeting.
Data for nine months (July-March) of the current fiscal year showed that Pakistan’s trade deficit narrowed to $15.4 billion, a contraction of 4.9%. Against $18.1 billion worth of exports, the import bill stood at $33.4 billion in July-March 2012-13..
Published in The Express Tribune, April 13th, 2013.
Like Business on Facebook to stay informed and join in the conversation.