ISLAMABAD, Nov 10: Pakistan’s trade deficit widened by 129 per cent to $1.945 billion in October as against $0.849 billion in the same month last year owing to a record increase in oil prices in the international market.

The overall trade deficit recorded an alarming growth of more than 38 per cent during the first four months of 2007-08 over the last fiscal year.

The widening trade gap is the outcome of more than 54 per cent growth in imports in October, which is the highest increase in a single month of the current fiscal year, while exports remained stagnated at around five per cent during the same month.

Official figures obtained by Dawn on Saturday indicated that in absolute terms the trade deficit reached $5.547 billion during July-October against $4.006 billion of the same period last year, indicating a rise of 38.46 per cent.

The increase in October import bill has disturbed the overall trade balance an only 13.53 per cent increase in trade deficit was recorded in the first three months of the current fiscal year.

In the first four months of last year, the trade deficit had witnessed a growth of around 18 per cent over the same period of previous year. The overall deficit stood at $13.564 billion during 2006-07 as against $12 billion over the previous year.

If the import growth continued to rise at the same pace, the deficit may reach around $15 billion during the current financial year.

Exports have gone up marginally by 4.63 per cent to $5.807 billion during July-Oct this year against $5.55 billion over the same period last year. A target of $19.2 billion exports has been set for 2007-08 but import target was not fixed as it is not manageable for the government.

Imports climbed by 18.81 per cent to $11.354 billion during the July-Oct period against $9.556 billion over the same period last year.

Analysts said the country had already been facing a current account deficit for the last couple of years owing to lesser export growth and record increase in imports.

They said this would be more worrisome for the new government as it could face serious problems to meet the current account deficit as no major transaction in privatisation or investment was expected in the current fiscal year.

A government economist, who did not want to be named, said that the unprecedented import growth was mainly due to 50 per cent rise in import of goods meant for re-export. He claimed the trade gap had been arrested during the current year, excluding October.

This gap was expected to come down in the months ahead, he said.

Pakistan’s annual import bill constituted 25 per cent of petroleum products followed by 8 to 10 per cent share of edible oil. These two commodities constituted one third of the import bill.

“If the prices of these two products increased in the international market, the import bill will record the similar growth. The impact of recent highest ever jump in oil prices was not reflected in the figures of October,” he said.

He said that the import figures for November 2007 would be even more worrisome as international oil prices were hovering around $100 a barrel.