KARACHI, April 12: The balance sheet of the national economy has been shattered badly by the record trade deficit while the hope for foreign investment is shrinking fast with the prevailing political uncertainty.

Analysts said another three months had left for the end of current fiscal year but the hopes for any improvement were dying fast, especially regarding the massive imbalances in exports and imports.Experts see multiple and compound impact of record trade deficit of over $14 billion in nine months, which, they believe, could press the rupee further against the dollar.

“The huge trade deficit of $14 billion clearly tells the market that dollar is in high demand in the local market,” said Abid Saleem, a currency dealer and exchange rate expert.

Not only the importers have been buying dollars but the State Bank was also involved in purchasing dollars through foreign banks to make some big payments like that of oil bill.

The payment of oil bills alone eroded the hard-earned foreign exchange reserves of the country build during the last eight years.

From July-March, $2.3 billion were drained out from the reserves of the State Bank reflecting the intensity of the situation.

Experts said the economy was facing inverse situation as the trade deficit was widening, while the foreign investment is shrinking.

The foreign private investment in 2006-07 reached $6.95 billion, up 79.6 per cent from $3.87 billion in the previous year.

However, in the last eight months of the current fiscal year foreign investment remained just 37 per cent of the inflows recorded in 2006-07.

“We don’t see any miracle in next three months, which can attract huge foreign investment and help the government minimise the current account deficit,” said Abid

The current account deficit in 2006-07 was a record with $7.016 billion, while this year it is expected set a new record.

Analysts see no significant drop in the oil prices in near future, which is consuming maximum dollars of this country. Experts estimated that the oil bills could even touch $9 billion or more at the end of the current fiscal year. The nation paid over $7.3 billion as oil bills in 2006-7.

The exports did not grow as per the expectation of the government but analysts said exporters would see even worse situation in the next months to come.

They said the dollar was getting weight against the rupee, which made their imported constituents of exportable goods costlier.

An earlier study conducted by the State Bank of Pakistan researchers showed that the imported constituents of Pakistani exportable goods were about 33 per cent.

This simply means that the exporters will have to incur additional cost to their products with appreciation of dollar against rupee. This would make their products costlier thus rendering these uncompetitive in the international market.