ISLAMABAD, May 9: Pakistan posted all-time record trade deficit of $11.083 billion during the first 10 months of this fiscal year, up by 16.81 per cent from $9.849 billion over the corresponding period last year.

The government had projected a $9.4 billion trade deficit for 2006-07 which was already surpassed, and it is expected that the country will suffer $14 billion deficit in external trade when the fiscal ends on June 30, 2007.

In 2005-06, the trade deficit hit the record level of $12.130 billion compared with $1.41 billion in 1999-2000. In 1990-91 to 1999-2000 the trade deficit remained within the range of $1bn to $3bn.

This highest ever trade deficit was witnessed as growth in exports dipped and imports grew at much higher rate during the period under review.

Official figures released here by Federal Bureau of Statistics (FBS) on Wednesday showed that the export of goods witnessed a marginal growth of 3.36 per cent fetching $13.909 billion during the July-April period as against $13.456 billion the same period last year. The government has set an export target of $18.6 billion for the current fiscal.

The export proceeds in May and June should be in the range of $4.691 billion for realisation of the export target which looks almost impossible.

Imports climbed by 8.92 per cent to $24.993 billion during the period as against $22.946 billion the same period last year. The import bill has been projected at $28 billion.

It was expected that the import bill cross $30bn mark by end of the fiscal year as the imports were growing at an average rate of nine per cent for the last 10 months.

Analysts say that the rising trade deficit is partly the result of macro policy focus, on growth, fiscal deficit and debt, which makes export expensive and imports cheaper hurting the industrial investment and trade competitiveness.

Indirectly, the policy focus has led to inflation and overvaluation of rupee, reinforcing the foregoing phenomenon. Continued large external imbalance creates structural weaknesses in terms of deteriorating term of trade, import penetration, weak production structure and un-competitiveness.

On the other hand, the poor implementation of the trade policies measures during the last years for diversifications of export base as currently the focus of the government was only on promotion of textile related products, which had already reached the saturation point.

As the export of the traditional products like footwear, surgical, sports and carpets are witnessing negative growth for the last couple of years but the government is least bother to revive the export share of these sectors, which provides employment to thousands of people.Similarly, the ill-planed policies of government of seeking greater market access for Pakistani products as it was not seconded by industrialisation or expansion of the production base of the existing industries had also led to greater trade deficit.

The opening of boarders for foreign goods through the mushrooming preferential trade agreements, Pakistan loose more in the shape of revenue and encouraging import of consumers items while Pakistan has no surpluses to export because of narrow industrial base.