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December 02, 2008


Pakistan trade deficit surging

The Dawn reported that Pakistan’s trade deficit stands at USD 14.486 billion during July 2007 to March 2008 period, crossing over the annual budgetary projections of USD 14.022 billion and exceeding the target by 3.3%.

According to the trade figures released by the Federal Bureau of Statistics, Pakistan suffered an all time high USD 14.486 billion trade deficit during July 2007 to March 2008 period as against USD 10.041 billion deficit during July 2006 to March 2007 period, showing an increase of 44.27% YoY.

Comparison of March 2008 over March 2007
Pakistan’s exports witnessed a healthy increase of 17.29% YoY with total exports USD 1.786 billion during March 2008 as compared to exports of USD 1.523 billion in March 2007. Imports during March 2008 were also on the higher side and stood at USD 3.823 billion as against the imports of USD 2.622 billion made during March 2007, showing an increase of 45.78% YoY. Trade deficit during March 2008 jumped to USD 2.036 billion as compared to a deficit of USD 1.099 billion during March 2007 indicating an increase of 85.26% YoY.

March 2008 over February 2008 comparison
Exports of Pakistan witnessed an increase of 14.89% MoM with total exports at USD 1.786 billion as compared with exports of USD 1.554 billion during February 2008. Imports increased by 4.48% MoM that amounted to USD 3.823 billion in March 2008 as against the imports of USD 3.659 billion in February 2008. Trade deficit showed decline by 3.20% MoM in March 2008 with total deficit of USD 2.036 billion as against the trade deficit of USD 2.104 billion in February 2008.

The government has fixed exports target at USD 19.2 billion and in order to meet the target, Pakistan requires exports to the tune of USD 4.713 billion in April 2008 to June 2009 period. Pakistan’s exports have been made uncompetitive in the international market by decline in industrial production due to power and gas shortages, increase in the prices of raw material and transportation charges.

In July 2007 to March 2008 period, Pakistan’s total exports amounted to USD 13.476 billion as compared to USD 12.377 billion, indicating an increase of 8.87% YoY. While the imports amounted to USD 27.962 billion as compared to USD 22.419 billion, projecting an increase of 24.73% YoY.

Dr Ather Maqsood Ahmed member of Fiscal Research & Statistics, in his recent analysis, said that the unprecedented increases in prices of oil and primary products like wheat and edible oil have put tremendous burden on the import bill of Pakistan. On the other hand, the performance of export sector has remained unsatisfactory, if not disappointing, thereby providing no respite to the balance of payment position.