ISLAMABAD, Nov 10: Pakistan’s trade deficit ballooned to an all-time high figure of $7.522 billion during the first four months of the current fiscal year, up by 33.33 per cent from $5.642 billion over the corresponding period last year.

Due to this highest-ever deficit, the country appears heading toward a balance of payments crisis unless relief arrives from the Friends of Pakistan or the International Monetary Fund (IMF).

This unexpected increase in imports bill also resulted into shrinking of country’s foreign reserves to $3.71 billion on Oct 25 from $14.2 billion a year ago, raising concern that Pakistan may not be able to pay its $3 billion debt-servicing costs due in the coming year.

The current account deficit also widened to $3.95 billion during the first three months of the current fiscal year against $2.27 billion in the same period last year.

The finance ministry estimated an amount of $3.5 billion to $4.5 billion to fill a financing gap and $9 billion to $15 billion to avoid a balance of payments crisis and make adjustments over the next two years.

Statistics released here by the Federal Bureau of Statistics showed the trade deficit, however, narrowed to $1.94 billion in October, compared with $2 billion in October last year, a decline of 2.91 per cent.

This decline occurred owing to decrease in oil prices to less than $60 a barrel and imposition of additional customs duty on imports of luxury items.

An official in the finance ministry said that the slowdown in imports of commodities in October was a healthier sign, which was going to reduce pressure on dwindling forex reserves of the country.

He said that the impact of the decisions already taken for slowing down import would be more visible in the months ahead, particularly in December next onward.

The government imposed additional customs duty on more than 370 items to curtail flow of imports in a bid to reduce trade deficit this year.

Last year, the trade deficit reached an all-time high of over $20 billion, putting extra pressure on reserves.

Prime Minister Syed Yousuf Raza Gilani has already constituted a high-powered committee, headed by State Minister for Finance Hina Rabbani Khar to monitor flow of imports into the country and to also suggest measures for curtailing it.

The government has also sought help from Saudi Arabia in the shape of deferred payment of oil imports, which would also help reduce pressure on the country’s reserves.

A similar request has also been made to the Iranian government.

Pakistan’s oil import bill crossed $11 billion mark last year in the wake of highest ever increase in oil price, when crude oil reached $147 per barrel in the international market.

The export of goods increased at a rate of 16.62 per cent to $6.762 billion during the first four months (July-Oct) of the current fiscal year as against $5.798 billion over the same period of the last year.

The government has set an export target of $22.1 billion for the year 2008-09.

A growth of 10.24 per cent was also observed in the month of October over the same month last year. The growth in exports, however, showed that the international credit crisis has not, so far, impacted Pakistan’s export proceeds to the US and the 27-member European Union, the worst hit targets of the current financial crisis.

Imports climbed by 24.86 per cent to $14.285 billion during the July-Oct period of the current fiscal year as against $11.440 billion over the same period of the last year.

On monthly basis, the imports, however, grew at much lower rate of 2.45 per cent to $3.467 billion in October against $3.384 billion over the corresponding month of last year.