Trade deficit falls 4pc

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ISLAMABAD : Pakistanís trade deficit in merchandise fell by about four per cent in the outgoing fiscal year 2012-13 from a previous year as imports dropped, while exports posted a paltry growth.

Since October 2012, imports are steadily on decline while exports rebounded owing to slight improvement in demand in European markets because of the preferential market access on more than 70 products, mostly textile related, suggested data of Pakistan Bureau of Statistics issued on Friday.The trade deficit narrowed down to $20.432 billion in 2012-13 as against $21.288bn over the previous year, reflecting a decline of 4.02 per cent.

The government has projected trade deficit target at $17.126bn for 2012-13, which has been surpassed by 19.3pc or $3.306bn.

Trade deficit was $21.271bn in 2011-12 that was $15.604bn in the preceding year, mainly driven by import of consumer goods and higher international crude oil prices.

Pakistan trade data also reflects the spillover effect in the growth of exports. Geographically, the EU and the US represent the most important destination of Pakistanís exports and their markets absorb 31pc and 23pc of exports.

China represents the third most important destination with an 11.5pc share.

UAE, Afghanistan, Oman and Turkey have recently become important destinations. Therefore, slow down in US and European economies and week demand have significant impact on Pakistanís exports.

Statistics show that exports rose to $24.518bn in July-June 2013 from $23.624bn in the corresponding period of the previous year, an increase of 3.78pc.

In 2011-12, exports stood at $23.641bn as against $24.81bn in the previous year, a decline of 4.71pc. For the outgoing fiscal year, government projected export proceeds at $27bn. But in the economic survey 2012-13 report, it was reported that export target will be $24.8bn by end June 2013, which was missed by 1.15pc ($282m).

On monthly basis, the export witnessed a growth of 2.81pc to $2.197bn in June 2013 as against $2.137bn over the corresponding month of previous year.

State Bank of Pakistan data showed that rupee depreciated by 5.86pc against the US dollar in fiscal year 2013 as against the 9.7pc fall witnessed in the previous year.

This fall in value of rupee is reflective from the exports proceeds as well.

In rupee terms, Pakistanís exports witnessed a growth of 12.39pc as it reached Rs2.372 trillion in 2012-13 as against Rs2.110tr in the previous year. This shows that the over three per cent growth in exports in terms of dollar is mainly because of rupee depreciation.

As a result of deceleration in export proceeds, the countryís current account deficit stood at around $2bn in July-May 2012-13. By June 30, the deficit was expected to cross the $2bn-mark.

Import bill grew by 0.08pc to $44.950bn in July-June 2012-13 from $44.912bn over the same period last year.

On monthly basis, imports dropped by 0.99pc to $3.940bn in June 2013 from $3.979bn over the corresponding month last year.

Courtesy: † Dawn

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