ISLAMABAD, Feb 9: Pakistan’s trade deficit increased by 77.84 per cent in January and swelled to $2.053 billion against $1.154 billion last year, mainly due to surging crude oil prices.

The trade gap ballooned as imports rose at a faster pace than exports during the month under review after a slight cut in the deficit in the previous month owing to 15 reduced working days on account of Eid holidays, Quaid-i-Azam’s birth anniversary, assassination of former prime minister Benazir Bhutto and disturbances after her death.

Official figures available with Dawn showed that the import bill increased by 51.48 per cent to $3.529 billion in January 2008 against $2.329 billion last year.

Exports grew by 25.60 per cent to $1.476 billion in January 2008 against $1.175 billion last year.

This growth in import and export was mainly due to delayed shipments, which were due in December last, but could not be shipped due to reduced working days.

For the first seven months (July-January) of 2007-08, the trade deficit increased by 35.15 per cent to $10.327 billion against $7.641 billion over the same period last year.

With the rising import bill, economists estimate that the trade deficit this year would easily cross $15 billion mark, the highest ever recorded in the history of the country.

Analysts said the trade account worsened sharply because of rising oil import bill, and heavy import of food grains, particularly wheat and pulses. But export growth has also slowed down, which also slightly worsened the trade account.

With the increasing oil prices, hopes for a narrow trade deficit in future have faded, and it may create a serious balance of payments problem for economic manager of the newly-elected government.

Pakistan’s exports to major US markets have slowed down owing to slow demand in the wake of recession in the US economy.

Official figures showed that exports grew by 5.95 per cent to $10.152 billion during the July-January period of the current fiscal year against $9.582 billion last year.

The government had projected an export target of $19.2 billion in the trade policy last year. For achieving this target, export proceeds should be in the vicinity of $9.048 billion in the next five months (February-June) 2007-08. However, with a slow growth in exports in the last seven months, there is no likelihood that the commerce ministry would even be close to their projected target.

On the other hand, the import bill reached $20.480 billion in July-January period of the current fiscal year, up by 18.90 per cent from $17.224 billion.

Though the government did not project any target for import bill in the trade policy, estimates show that it would easily reach around $35 billion by the end of June. Last year, the import bill had crossed the figure of $30 billion.