KARACHI: Trade deficit widened 29 percent to $15.03 billion in the first five months of the current fiscal year of 2017-18 as import growth outnumbered a surge in exports.
Pakistan Bureau of Statistics (PBS) data showed that exports rose 10.5 percent to $9.03 billion in the July-November period, while imports climbed 21.1 percent to $24.06 billion.
Trade deficit amounted to $11.7 billion in the corresponding period of FY2017 as exports stood at $8.17 billion, while imports were recorded at $19.86 billion.
Exports, after a downward trend in the past couple of years, are showing recovery as government took measures, including provision of tax incentives, to encourage exporters amid much-needed foreign exchange reserves.
Current account deficit amounted to $5.01 billion in the first four months of the fiscal 2017-18 as compared to $2.26 billion in the same period a year earlier.
Though the government managed to raise $2.5 billion through issuance of dollar notes, it has to invoke real growth in exports sector, which accounts for a mere seven percent of GDP.
Rupee lost as much as four percent in a single day trade to currently revolve in the range of Rs108 to Rs110 a dollar – a level that has long been demanding by the International Monetary Fund, traders and analysts.
Rupee devaluation will, however, increase cost of imports as well as debt repayment obligations. Growing imports, which are linked to infrastructure development, helped the economy achieve a decade high growth rate of 5.3 percent in FY2017. Government set a six percent growth target for FY2018.
Meanwhile, PBS recorded a 4.1 percent rise in exports of services at $1.66 billion in July-October, while imports of services increased 6.2 percent to $3.32 billion. Trade deficit in services amounted to $1.66 billion, up 8.42 percent in the first four months of the current fiscal 2017-18.
