ISLAMABAD, Dec 11: Pakistan’s goods trade deficit increased by 17.91 per cent in the first five months of fiscal year 2006-07 (July-November) over the past year’s figures as exports grew at a much lower rate than imports.
According to statistics released by the Federal Bureau of Statistics here on Monday, the July-November trade gap totalled $5.405 billion against $4.58 billion during the same period last year. The exports rose by just 5.09 per cent to $6.927 billion during the five months against $6.591 billion over the same period last year. The government had set an export target of $18.6 billion for 2006-07.
While imports climbed by 10.35 per cent to $12.33 billion during the July-November period of the current fiscal year against $11.176 billion over the same period last year. This high import growth has resulted in pushing the trade deficit further. The government has projected an estimated import bill of $28 billion for the fiscal year 2006-07.
Commerce Minister Humayun Akhtar Khan told Dawn that a reverse trend was witnessed in exports of goods during November 2006 against the same period last year. The month-on-month figures showed that exports growth was slightly higher in November 2006 by comparison with figures for last year.
The exports rose by 23.94 per cent to $1.38 billion during November 2006 as against $1.113 billion over the same month last year. However, the import bill reached $2.773 billion in November 2006 — up by 20 per cent against $2.299 billion over the same month last year.
“I am encouraged by the maximum exports realisation in the month under review,” he said and added it is hoped that exports would grow at a higher pace during the months ahead for achieving the target.
The minister said his ministry was working on a strategy paper to determine if Pakistani products had level playing field in the international market with products coming from China and India.
“We would also determine the impact of domestic inflation with inflation in countries which are our competitors in the international market,” the minister said. He said: “If inflation in Pakistan is higher than our competitors, it means that our cost of production is higher, rendering our products less competitive. Lower inflation in competitor economies would also mean that our exporters would get lower prices for their products abroad.”
Dr A.R. Kamal, a former director of Pakistan Institute of Development Economics (PIDE), told Dawn that the data released by the FBS for five months showed that the government policy announced at the time of the budget had failed to curtail flow of imports. He said it seemed that the policy would not help reduce imports and increase exports.
He said in case the trend continues for another few months, it would have a serious impact on the country’s balance of payments. As there was no surplus in non-traditional products, exports also did not seem to grow at much faster pace in the months ahead.
