ISLAMABAD, Jan 14: The balance of trade dipped by 2.98 per cent in December on the back of over eight per cent decline in the import bill, commerce ministry said on Monday.

The trade account also deteriorated after 12 per cent decline in export proceeds during the month under review. This decline has been linked for disruption in trading activities in the month under review for around two weeks as a result of Eid holidays, assassination of former prime minister Benazir Bhutto and its fallout.

Official statistics showed that export dipped by 12.05 per cent in Dec as it stood $1.333 billion against $1.516 billion same month in 2006. The import bill also declined by 8.35 per cent to $2.350 billion from $2.564 billion.

As a result, the balance of trade declined to $1.016 billion against $1.047 billion.

A senior official in the commerce ministry said that the exports will increase in the months ahead as there was a demand for Pakistani textile products in international market. He said that some primary commodities like rice export is also picking up in the months ahead on the back of greater demand in international market.

According to the statistics, the trade deficit, however, widened by 26.99 per cent in the half year to $8.238 billion in Jul-Dec period of the current fiscal year against $14.894 billion last year.

The trade gap is the outcome of more than 13 per cent growth in imports in the first half year over last year. This growth in import is expected to rise as oil prices have already touched $100 per barrel this year and the import of over 1.5 millions tons of wheat.

Official figures released here on Monday by the Federal Bureau of Statistics (FBS) showed that the trade deficit increased by 15.71 per cent to $1.618 billion in Nov 2007 against $1.398 billion last year.

Exports have gone up 3.67 per cent to $8.715bn during Jul-Dec this year as against $8.407 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.

The import bill in the first half year reached to $16.953 billion during the period under review as against $14.894 billion over last year, indicating a growth of 13.82 per cent.

The State Bank in its first quarterly report, said the textile sector, which until recently had been the main driver of the exports growth could only muster 1.0 per cent growth during the current fiscal year, while the food and petroleum sectors’ exports declined.

Even the nominal growth in the textile sector was caused by a rise in the low value added category of synthetic textiles and in knitwear exports.

Exports of all the middle and high value added categories including garments, bedwear and towels experienced a fall. The sluggish performance of textile sector highlights the tough competition faced by this sector in its major markets. This scenario suggests a possibility of further deceleration in textile export growth in the short term.

Keeping in view the large share of textile sector in exports, this might translate into the deceleration of overall export growth as well.

The growth in imports on the other hand seems to have rebounded, which is evident from the broad based surge in imports witnessed in the first half year of the current fiscal year.