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Pakistan’s trade deficit increases by 14 per cent

ISLAMABAD — Pakistan’s trade deficit went up sharply to $3.6 billion during July-September 2007-08, which was about 13.53 per cent higher than $3.17 billion in the corresponding period of the last fiscal, according to the data released by the Federal Bureau of Statistics (FBS) yesterday.

During the first three months of the current fiscal year, Pakistan’s exports totalled $4.45 billion and imports $8.06 billion against $4.25 billion and $7.42 billion, respectively, during the same period of the last fiscal.

The provisional FBS data revealed that during the period under review, Pakistan’s economy pulled in 8.51 per cent more imports over the same period of last fiscal, while its exports rose only 4.77 per cent. Each month, the import growth exceeds that of export, steadily widening the trade gap.

Pakistan’s imports declined by 0.46 per cent to $2.73 billion in September 2007 from $2.75 billion recorded in August 2006, while comparing to the same month’s imports with the corresponding September 2006 ($2.44 billion), it went up by 12 per cent.

During the month under review, goods worth $1.49 billion have been exported, recording an increase of 5.69 per cent against exports of $1.41 billion in September 2006.

However, comparing exports of September 2007 with the previous month, the data revealed an increase of only 1.09 per cent as against exports of the previous month, which stood at $1.47 billion.

Independent economists say that though trade deficit is considered a good sign for a growing economy, in the case of Pakistan it is very large and requires immediate attention.

During the last fiscal 2006-07, the government in its trade policy targeted imports at $28 billion and exports $18.6 billion with a trade deficit of $9.4 billion but at the end of the fiscal, it surpassed the deficit target and which reached $13.53 billion. During the fiscal 2006-07, Pakistan’s economy also missed its export target by a wide margin of $1.59 billion and breached the import target by $2.54 billion.