Trade deficit widened in AprilMay 12, 2016 at 3:41 pm
ISLAMABAD: The trade deficit rose nearly 20 per cent year-on-year to $2.15 billion in April due to a double-digit fall in exports and a slight increase in imports, the Pakistan Bureau of Statistics said on Wednesday.
During the first 10 months (July-April) of this fiscal year, the deficit stood higher by 7pc at $19bn compared to $17.8bn a year earlier.
An official source attributed the rise in deficit to increase in imports of non-essential items, and iron and steel products.
In April, the overall import bill rose 2.3pc year-on-year to $3.9bn. In contrast, the bill fell 3.7pc to $36.3bn in July-April FY16 from $37.7bn a year ago.
Exports of merchandise dipped 13pc to $17.3bn in the 10-month period from $19.9bn in the same period of the last year, indicating dampened international demand. In April, exports dropped 13.4pc to $1.722bn from $1.99bn in the month of the previous year.
The decline in exports was mainly attributed to slow proceeds of the textile sector, which accounts for about 56pc of the total exports, and other products like petroleum (naphtha and petroleum products), jewellery, leather products, engineering goods, furniture, cement and guar.
Under a three-year strategic trade policy unveiled earlier this year, the government set an annual exports target of $35bn by 2018.
A trade official argued that the country’s exports were falling only in value terms as their quantity has increased. He said the decline in commodity prices on the international market was one reason for lower value of exports.
According to a recent World Bank report, slowdown in China and a weak recovery in the European Union might have an impact on Pakistan’s exports. China constitutes 10pc ($2.2bn) of Pakistan’s overall exports.
The report added that the competitiveness of the textile sector may be affected by recent appreciation of the real exchange rate. Last year, textile exports declined mainly on account of decrease in low value-added exports due to structural bottlenecks and lower demand from China and Bangladesh, major buyers of Pakistani cotton yarn and fabric.