ISLAMABAD, Jan 29: Pakistan’s trade deficit is expected to expand by 10 to 15 per cent if the US attacks Iraq, according to a preliminary projection.

The major item for the possible increase in trade deficit will be petroleum products, which constitutes one fourth of Pakistan’s total imports, senior commerce ministry officials told Dawn on Wednesday.

In case of war, the lowering of trade gap achieved during the last two years would receive a sever blow, they said.

The trade deficit was narrowed down to $1.204 billion during the financial year 2001-02 from $1.527 billion of corresponding year, showing a decrease of more than 21 per cent.

Elaborating further, the officials said that Pakistan imports more than 50 per cent of its total oil imports from Kuwait.

To maintain the price of petroleum products along with its supply, the officials said, Kuwait has assured Prime Minister, Mir Zafarullah Khan Jamali to Gulf States, uninterrupted supply of oil to Pakistan.

But if Iraq attacks Kuwait in retaliation to the US attack, as the Iraqi government has declared, that would result in possible disruption in supply of oil to Pakistan.

This disruption would affect the manufacturing of those industries, which are running on thermal power.

The officials also did not rule out the possibility of imposition of war risk premium, which would have an impact on the exports of the country.

Official statistics made available to Dawn showed that Pakistan’s trade deficit with Middle Eastern countries decreased by more than 18 per cent to $2.07 billion during the financial year 2001-02 against $2.55 billion over the corresponding period.

Further break-up showed that Pakistan’s total exports to Middle Eastern countries stood at $1.421 billion during the financial year 2001-02 against $1.207 billion over the corresponding year, showing an increase of 17.7 per cent.

Exports from these countries to Pakistan during the year 2001-02 stood at $3.494 billion against $3.761 billion of the financial year 2000-01, showing a decrease of 7 per cent.

Pakistan major exports to Saudi Arabia in 2001-02 stood at $330.418m, to Dubai $719.635m, to Kuwait $58m, to Oman $47 million, to Bahrain $43m, to Iraq $30.31 million, and to Yemen $35 million.