Pakistan's Trade Deficit Narrows to $1.41 Billion in June as Exports Rise

[WAQAS119]

Pakistan's Trade Deficit Narrows to $1.41 Billion in June as Exports Rise


Pakistan’s trade deficit narrowed by 22.7 percent in June as exports climbed and imports fell.

The trade gap narrowed to $1.41 billion in the last month of the fiscal year, from $1.82 billion a year ago, according to a faxed statement from the Commerce Ministry in Islamabad.

“The decline in oil prices from last year was one of the main factors in narrowing the trade gap,” said Muhammed Imran, head of research at Arif Habib Securities Ltd., in Karachi. “The revival of demand for Pakistani textile from overseas helped.”

Overseas sales rose 19.5 percent to $1.82 billion, while imports fell 3.45 percent to $3.22 billion, the data show.

Pakistan is seeking to boost exports to sustain growth in a country where the World Bank estimates a quarter of the population lives on less than a dollar a day.

Pakistan’s trade deficit narrowed 10.5 percent to $15.3 billion in the 12 months ended June 30, from $17.1 billion a year earlier. Exports rose 9.6 percent to $19.4 billion and imports dropped 0.3 percent to $34.7 billion in the 12 month period.


Pakistan's Trade Deficit Narrows to $1.41 Billion in June as Exports Rise - Bloomberg

 

[Hyde]

if we have electricity and inflation in control, we have potential to export a lot of products.

 

[kidwaibhai]

we need to increase the tax on luxury items so that the gap is reduced further.

 

[Nahraf]

The Pakistani Rupee has fallen to historic lows which has helped exports and caused fall in imports. It costs Rs 85.50 to get a US dollar. I remember just few years ago it was around Rs 45 !

 

[DaRk WaVe]

Trade deficit shrinks by over 10%​

The trade deficit narrowed 10.6 per cent during financial year 2009-10 compared to a year ago due to strong recovery in exports and contraction of imports, said the Federal Bureau of Statistics.

The gap between imports and exports shrank to $15.4 billion in the year ended June 30 compared to a deficit of $17.2 billion in 2008-09, a dip of $1.8 billion or 10.54 per cent.

However, despite the significant reduction in deficit, Pakistan missed the annual export and import targets set by the Ministry of Commerce.

Provisional trade data showed that during the financial year ended June 30, Pakistan exported goods worth $19.4 billion to the rest of the world, recording an increase of 9.6 per cent when compared to last year. The export target for the year had been fixed at $20 billion.

The import target was missed by a staggering $6 billion as the total value of goods coming into the country was estimated to be $34.7 billion, a mere 0.4 per cent drop compared to imports in fiscal 2008-09. The ministry had hoped to bring imports down to $28.7 billion.

“The improvement in trade deficit and record remittances will enhance the country’s capacity to pay back International Monetary Fund loans,” commented Saqib Sherani, the Principal Economic Adviser to the Finance Ministry.

He added that a surge in non-traditional export items like gems and jewellery had helped the country earn about $2 billion. He suggested that there was a need to further diversify the export basket.

The massive depreciation of the rupee against the dollar had also provided exporters a window of opportunity to sell their products in the foreign market at competitive rates.

On the imports side, a substantial drop in prices of crude and palm oil in the international market coupled with reduced domestic demand slashed the import bill. Imports of machinery and telecommunication equipment also decreased during the last fiscal year.

The trade deficit demonstrated an improvement of over 22 per cent in June 2010 when compared with the same month of the previous financial year. According to official statistics, exports in June 2010 increased to $1.81 billion from $1.53 billion recorded in June 2009. Imports during the month were around $3.3 billion, a reduction of more than three per cent as compared to last June.

While comparing the performance of exports in June 2010 with the previous month of the same year, it was learnt that exports increased by 3.8 per cent in dollar terms. Resultantly, the trade deficit in June shrank by 12 per cent when compared with May. Pakistan exported goods amounting to $1.82 billion in the month of June.

Imports during the month, as compared with May, decreased from $3.4 billion to $3.3 billion.

 

[mjnaushad]

Slow and steady....We can't overcome this huge mess in few days....But if the direction is right....Then we wont have any problem and a bright future will be awaiting.