May 10, 2008	Saturday	Jamadi-ul-Awwal 4, 1429

WASHINGTON, May 9: The US trade deficit shrank more than expected in March to $58.2 billion, as the weak dollar boosted exports and as imports fell sharply, a government survey showed on Friday.

The trade gap narrowed to $58.2 billion from a revised $61.7 billion in February. Most economists had predicted that the deficit would narrow to $61.3 billion in March.

The improvement in the US trade picture was largely tied to the ailing dollar which has tumbled sharply in value against other world currencies and made US-made goods much more affordable.

A hefty decline in imports also helped trim the trade deficit.

“Imports were down across most major sectors,” said Stephen Gallagher, a US economist at Societe Generale.

While economists generally welcomed the 5.7 per cent reduction in the US trade deficit, partly as export growth can be expected to boost US economic growth, they said that a decline in imports suggests weakening American consumer demand.

February’s trade deficit was revised lower to $61.7 billion from an original estimate of $62.3 billion, the Commerce Department reported.

The combination of robust exports and slumping imports helped to narrow the overall trade deficit in March.

Although the value of US-made exports slipped marginally in March from the prior month by 1.7 per cent to $148.5 billion, exports remained at historical highs.

Exports marked their second-highest peak in March, following a record high in February of $151.1 billion.

“The weaker dollar against the euro, pound and Canadian dollar is boosting exports,” said Peter Morici, a business professor at the University of Maryland.

Imports declined a significant 2.9 per cent during the month to $206.7 billion, as Americans cut back on foreign purchases which have become more costly due to the weak dollar.Imports dropped as Americans bought fewer foreign-made cars and trucks, consumer goods, industrial supplies and certain foods among other goods, the government survey showed.—AFP