Exports increase 18% YoY

Trade deficit for February 2014 contracts 7.5% YoY.

ISLAMABAD: Pakistan’s exports increased dramatically by 18% in February compared with the corresponding month last year, almost three times more than the growth in imports, clocking in at $2.2 billion, according to the Pakistan Bureau of Statistics (PBS).

The growth in imports was recorded at 6.4% in February over the corresponding period of the previous year. Due to exceptional growth in exports, the trade deficit contracted in February compared to the same month last year, according to the PBS.

The trade deficit – gap between imports and exports in trade of merchandise goods− was recorded at $1.43 billion in February 2014, lower by 7.5% or $115 million when compared with February 2013, showed the trade summary released by the PBS.

In February 2014, imports stood at $3.6 billion, which were 6.4% or $217 million higher than the imports in February 2013.

For the first time in recent months, the monthly import bill has remained lower than official foreign currency reserves held by the State Bank of Pakistan (SBP). The SBP’s reserves stood at $3.9 billion by the end of February as a result of ‘aid’ given by ‘friendly countries’ to the Pakistan Development Fund (PDF), established after the changing geopolitical situation in gulf countries.

Meanwhile, the Pakistani currency continued appreciating against the United States (US) dollar. On Monday, the inter-bank rate further came down to Rs102.2, thanks to contributors of the PDF.

The terms of trade are expected to improve further in coming months, if the exporters are able to fully exploit the benefits offered to them under the duty free access to the European Union markets, according to analysts. The Generalised System of Preference Plus facility became effective from January.

On a month-on-month basis, the trade deficit in February over January dramatically contracted 31%. The trade deficit was $1.43 billion in February, $643 million lower than the trade deficit posted in January. Exports grew 5.2% month-on-month while imports contracted 13% in February over January, according to the PBS.

For the period from July-February of the fiscal year 2013-14, the trade deficit stood at $12.6 billion, which was 4.9% or $645 million less than the deficit the country posted in the corresponding period last fiscal year, according to the PBS.

Import payments in the period under review were $29.4 billion, $339 million or 1.2% higher than the payments made in the comparative period of the previous year, according to the PBS.

Exports during July-February remained at $16.9 billion as compared to $15.9 billion of the previous year, showing growth of 6.2% or $984 million.

For the current fiscal year, the government has targeted increasing exports to $26.6 billion and estimated that its import bill will remain at $43.3 billion, showing a gap of $16.7 billion in trade of merchandise goods.

Published in The Express Tribune, March 11^th, 2014.

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