Pak trade deficit narrows to $3.377b

Pakistan has witnessed a drop in the trade deficit marginally as imports fell 1.99 per cent in the first two months of the current fiscal year. As a result, the trade deficit dipped 0.44 per cent lower to $3.377 billion in two months ended Aug.31, from $3.392 billion in the same period a year ago, suggested data of the Pakistan Bureau of Statistics (PBS) released on Friday. The data indicated the overall slowing down of the economy. Exports fell 3.27 per cent in July-Aug.2012 while imports declined 1.99 per cent. For the current fiscal year, government projected export proceeds at $25.618 billion. Trade deficit swelled to $21.271 billion in 2011-12 from $15.604 billion in the previous year mainly driven by imports of consumer goods and higher international crude oil prices. For 2012-13, government has forecast trade deficit at $17.126 billion which reflects low demand from manufacturing side. An official in the commerce ministry said the dip in Pakistan’s exports is mainly due to reduction in consumer demand in major economies such as Europe and United States and also due to major power breakdowns and energy shortages. Statistics show that exports fell to $3.969 billion in July-Aug.2012 from $4.103 billion in the corresponding months last year, showing a decline of 3.27 per cent. In 2011-12, Pakistan’s exports stood at $23.641 billion as against $24.810 billion in the previous year, a decline of 4.71 per cent. The commerce ministry is also working on its next three years (2012-15) trade policy framework which is expected to be laden with measures to boost exports. The trade policy is expected to be announced this month. As a result of dwindling exports proceeds, Pakistan’s current account deficit also widened to $4.52 billion in 2011-12 fiscal year from $3.93 billion from a year ago. This increased was witnessed despite the fact that remittances recorded growth during the outgoing fiscal year. On the other hand, import bill declined by 1.99 per cent to $7.346 billion in July-Aug.2012 from $7.495 billion over the same months last year. According to the official, the decline is witnessed in import of machinery and raw materials because of high depreciation of Pakistani currency. Meanwhile, Pakistan’s Federal Board of Revenue (FBR) has been able to collect Rs1883 billion ($20.032 billion) during the last financial year 2011-12 by attaining a growth of 20.9 per cent. It is encouraging to note the tax GDP ratio has considerably improved by 0.6 percentage points during the year and reached to 9.2 per cent from the lowest level of 8.6 per cent in the year 2010-11, an FBR Quarterly Review said. From gulftoday