Trade deficit to hit $19.525bn as imports rise beyond estimate

By Sajid Chaudhry

ISLAMABAD: Trade balance of the country based on latest balance of payment estimates is likely to reach at negative $19.525 billion against the budgetary estimates of $14.022 billion, official sources told Daily Times on Thursday.

Balance of payment estimates finalised by the new government, based on latest data, revealed that exports target was envisaged at $18.992 billion and the exports of the country during July-February period of current fiscal year amounted to $11.703 billion. It is now projected that exports of the country would fetch $18.650 billion by the end of current fiscal year against the budgetary target of $18.992 billion.

In the Trade Policy 2007-08 the Ministry of Commerce had fixed an exports target of $19.2 billion and realisation of $18.650 billion through exports would mean a shortfall in exports to the tune of $550 million during the current fiscal year 2007-08.

The imports were projected to be $33.014 billion at the time of the announcement of the budget; however, the imports have reached at $24.140 billion during July-February period. The imports of the country are now projected to be around $38.175 billion by end of current fiscal year as compared to the budgetary target of $33.014 billion, projecting an increase in imports by $5.161 billion in the current fiscal year 2007-08.

Invisible balance was estimated at $4.351 billion in the current years budget and during the July-February period this balance stood at $2.414 billion. The latest projections suggest that invisible balance during July-June period is to be $4.570 billion as against the budgetary projections of $4.351 billion.

Services (net) balance was estimated at 7.279 billion and during July-February period this balance amounted to $4.844 billion. According to the latest projections services balance will reach at $6.680 billion by June 30, 2008.

Private transfers were estimated at $11.630 billion during the current year’s budget and during July-February period private transfers amounted to $7.258 billion. The latest estimates suggest that private transfers are going to reach at $11.250 billion by the end of current fiscal year against the budgetary projection of $$11.630, leaving a shortfall of 38 million.

Workers remittances were projected in the budget to be $6.200 billion and in July-February period of ongoing fiscal year remittances have reached at $4.126 billion. According to the latest estimates remittances would be around $6.300 billion by the end of current fiscal year.

Latest import growth estimates suggest that imports would grow by 25 percent during this fiscal year and during July-February period a growth in imports was recorded at 21.9 percent. Exports growth would reach at 9.9 percent, suggest the latest estimates. The growth in exports during July-February period was recorded at 7.8 percent against the budgetary projection of 11.9 percent for the current fiscal year.

According to Asian Development Outlook 2008 released recently, the trade gap widened by over 25 percent in the first 7 months of this fiscal year. Textile exports remained, and will continue to be weak on expected lower cotton production and increased regional competition after the US and EU have ended the safeguard measures on textile imports from China. Higher shipping costs following the increase in oil prices will affect the services account further, which had already widened by almost 52 percent in the first 7 months of financial year 2008.

http://www.dailytimes.com.pk/default.asp?p...11-4-2008_pg5_8

Country’s trade deficit becoming a quagmire

By Sajid Chaudhry

ISLAMABAD: Country’s trade deficit stands at $14.486 billion during July-March period of current fiscal year crossing over the annual budgetary projections of $14.022 billion and exceeding the target by 3.3 percent.

The country suffered an all-time high $14.486 billion trade deficit during the first nine months of the current fiscal year against the $10.041 billion deficit during the same period of last fiscal year, showing an increase of 44.27 percent, according to the trade figures released by the Federal Bureau of Statistics (FBS) on Friday.

The government has fixed exports target at $19.2 billion, and in order to meet the target the country requires exports to the tune of $4.713 billion in April-June period of current fiscal year. The country’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. Dismal performance of textile sector in exports and increase in oil prices in the international market widened the trade gap and it is expected that it would reach at $19.525 billion by the end of this fiscal year.

In July-March period of current fiscal year, country’s total exports amounted to $13.476 billion during first nine months as compared to $12.377 billion during same period last fiscal year indicating an increase of 8.87 percent. While imports amounted to $27.962 billion as compared to $22.419 billion imports in the same period of last fiscal year, projecting an increase of 24.73 percent.

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

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

Dr Ather Maqsood Ahmed, Member Fiscal Research and Statistics, in his recent analysis said that the unprecedented increases in prices of oil and primary products like wheat and edible oil (palm oil) have put tremendous burden on the import bill of the country. 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.

http://www.dailytimes.com.pk/default.asp?p...12-4-2008_pg5_2

Trade deficit widens to $14.48bn in 9 months



Saturday, April 12, 2008
By Aftab Maken

ISLAMABAD: Pakistan’s trade deficit for the first nine months of the current fiscal year widened to a record $14.48 billion against $10.04 billion in the same period of the last fiscal year, showing an increase of 44.2 per cent, the Federal Bureau of Statistics (FBS) said on Friday.

Finance Minister Ishaq Dar, in a fact-sheet about the economic situation of the country at the end of this fiscal year the other day, warned that the fiscal deficit of 4 per cent of the GDP projected by the last government would grow to an alarming 9.5 per cent of the GDP if immediate measures were not taken.

The trade deficit of the country based on the latest balance of payments estimates is likely to reach $19.525 billion against the budgetary estimates of $14.022 billion.

During July-March 2007-08, the country’s exports were $13.47 billion and imports $27.96 billion against $12.37 billion and $22.41 billion, respectively recorded during the corresponding period of last year, the FBS data said.

In the Trade Policy 2007-08, the Ministry of Commerce had fixed an export target of $19.2 billion and a realisation of $18.650 billion through exports would mean a shortfall to the tune of $550 million during the current fiscal year.

Exports in the first nine months of the fiscal year stood at $13.47 billion, showing a growth of 8.87 per cent when compared with the same period of the last corresponding year, whereas, imports surged to $27.96 billion with an increase of 24.73 per cent in the period under review.

Increase in the exports is mainly attributed to the depreciation of the dollar in non-dollar markets like Euro-zone, Japan and the Gulf countries, and the increase is only in dollar terms but not in quantity, a senior official of the commerce ministry commented on the situation, while requesting anonymity.

In the fiscal year 2006-07, the government missed its exports target of $17 billion by a margin of $531 million. During March 2008, local goods worth $1.78 billion were exported, recording an increase of 17.29 per cent against the exports of $1.52 billion in the same month last year.

Imports were $3.82 billion during March 2008, up by 46 per cent compared to $2.62 billion in March 2007. However, when comparing the exports of March 2008 with the previous month of February, the bulletin reveals an increase of 14.89 per cent as against the exports of the previous month from $1.55 billion to $1.78 billion. The imports only show a marginal increase of 4.48 per cent from $3.65 billion to 3.82 billion in February 2008.

http://www.thenews.com.pk/daily_detail.asp?id=106205

I don't understand how Pakistan hasn't managed to increase its exports. We have a massive labor force, we have a competitive advantage for export due to our rupee, we have decent infrastructure. Yet our exports are non-existent .

Our main exports remain to be agricultural products and the increasing demand for food products within pakistan itself cut from the exports.

Our diversification of the economy is still quite slow, we haven't gone through massive industrialization as of yet and the price of oil is killing us.

We need to get those dams built so we can cut the energy bill. That should be priority number one.

We should be ashamed off ourselves for having such lame economic figures even although as a good will gesture China signed FTA with Pakistan in 2006. But our politicans are so corrupt we never make progress even if it is handed to us in a silver plate.

This is a serious issue and the new government will have to fix it. There's no progress without a healthy economy. Alternative energy resources will have to substitute oil in order to curb the sky rocketing costs. I just can't understand why we haven't utilized our massive coal reserves up to this day. Obviously, exports also need to be balanced with import.