Friday, November 12, 2010

Trade gap narrows by 11 per cent

ISLAMABAD: The balance of trade decelerates more than 11 per cent in October as imports become costlier due to imposition of regulatory duties and devaluation of rupee, suggests data of federal bureau of statistics issued on Thursday.

As a result, exports rose at a faster clip than imports in the month under review over the corresponding month last year indicating a slower domestic demand for imports due to enforcement of the IMF-led austerity measures by the government.

However, it was not clear from the statistics whether the slowing down in imports occurred because of fewer imports of raw materials, consumer goods and machinery.

Official figures released here by FBS showed that trade deficit dipped to $1.231 billion in October this year from $1.394 billion over same month last year, showing a decline of 11.67 per cent.

Imports recorded a paltry growth of 8.38 per cent as it stood at $3.22 billion in October as against $2.97 billion of last year. However, the overall volume of imports witnessed a growth of 16.02 per cent in July-Oct period this year as it reached $12.24 billion against $10.56 billion over the same months last year.
Meanwhile, exports of commodities surged by 26.1 per cent to $1.988 billion in October, 2010 as against $1.58 billion over the same month last year. A growth of 19.17 per cent was witnessed in July-Oct period this year as it stood at $7.168 billion against $6.01 billion earlier.
For the first four months of the current fiscal year, the trade deficit rose by 11.86 per cent in July-Oct to $5.43 billion over the same period last year.

The government has projected that exports will grow paltry on account of global uncertainty and continued energy shortages and security situation. The export target has been estimated at $19.9 billion for 2010-11 against $19.2 billion last year, an increase of only $700 million.
The robust growth of over 19 per cent in first four months of the current fiscal year indicates that the export target will be achieved easily.

The experts attributed the increase in exports to higher global demand for low value textile products and massive depreciation of the rupee, which made Pakistani commodities competitive in international market.
The government has projected import bill to reach $31.7 billion during 2010-11, an increase of 6 per cent from $29.9 billion last year.

Analysts believe that the import bill is likely to go up following spiking oil prices in world markets. The government will also import materials for the reconstruction of flood-affected areas in the next few months.

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