KARACHI, July 9: Pakistan's trade imbalance during 2003-04 swelled to more than three times to $3.20 billion as against a little more than one billion dollar trade deficit suffered in 2002-03.

Trade analysts predict a much higher trade deficit in the current fiscal year of 2004-05 when food import bill is set to increase to more than $1.5 billion, crude oil prices remain uncertain due to unpredictable Middle East situation, which is bound to have an all round effect, and a threat of mounting inflationary pressures on domestic economy could push up the local production cost and blunt competitive edge of Pakistan's exports.

The growing trade imbalance during 2003-04 is because of almost 27 per cent increase in the imports which stood at $15.47 billion as against $12.22 billion in 2002-03. The rising import bill wiped off the impact of 10 per cent growth in exports during the last fiscal year.

Total exports during 2003-04 amounted to $12.27 billion as against $11.16 billion a year earlier.

The import bill touched new record high level in 2003- 04 because of the impact of a more than 39 per cent growth in import of machinery and equipment, over 15 per cent in import of synthetic yarn and fibre and second-hand clothing, more than 26 per cent rise in import of fertilizer, insecticides, almost 31 per cent in import of iron and steel scrap, iron and steel and aluminium and about 40 per cent in miscellaneous groups.

The import of machinery cost more than $4 billion during 2003-04 mainly because of acquisition of aircraft for the PIA, which were worth about $701 dollars showing a growth of over 482 per cent, agricultural machinery and equipment involved payment of more than $1 billion payment, a rise of 32.5 per cent.

Textile machinery import increased by over 10pc and was worth about $586m. Construction machinery import and electric power generators import showed decline. Exports maintain growth tempo but failed to match the import growth. Textile products remained the driver of export growth and showed an overall rise of about 12 per cent.

There are now five textile products in billion dollar group. In fact fabric export showed a brisk growth of more than 27 per cent to touch $1.71 billion figure. Yarn fetched $1.4 billion, knitwear $1.47 billion bedwear $1.30 billion and readymade garments $1 billion.

Engineering goods export showed a robust growth of over 30 per cent. Almost all engineering items electric fans, transport equipment, auto parts and few other categories of machines showed impressive growth in the exports.

Exports during the current fiscal year face a challenge at the turn of the year when textile export quotas are dismantled and Pakistan enters the mainstream of international market.

Textile operators are confident to convert this challenge into opportunity. More than $3 billion have been invested in revamping textile industry during last four years. This has led to improvement in quality of the products and helped in cost cutting, which has given some edge to selected products in the international market.