ZAHEER ABBASI

ISLAMABAD: Pakistan’s trade deficit rose to $ 23.38 billion during the first nine months (July-March 2017) of the current fiscal year, up by 38.80 per cent from $16.84 billion for the same period a year before, according to Pakistan Bureau of Statistics (PBS).

Provisional trade data released by the PBS on Tuesday showed a decline of 3.6 per cent in exports during July-March 2017 with exports contracting to $ 15.119 billion in the first nine months of the current fiscal year as compared to $ 15.597 billion for the same period of the last fiscal year.

However, imports increased to $ 38.504 billion in July-March 2017 as compared to $32.445 billion for the same period of last fiscal year, showing an increase of 18.67 per cent.

The government’s Rs 180 billion incentive package announced three months ago to increase exports, however, failed to yield desired results and push the country’s exports to the expected level as foreign trade figures for the period under review showed that exports have declined by 3.9 per cent during July-March 2017.

Sources said that widening in trade gap would have serious ramification on current account deficit as well as foreign exchange reserves. The International Monetary Fund (IMF) in a statement at the completion of the Article-IV Consultations had said that Pakistan’s current account deficit is expected to reach 2.9 per cent of GDP in the fiscal year 2016-/17 owing to a higher trade balance — in part reflecting increased imports of capital goods and energy — and stagnant remittances.

Trade deficit increased to $ 3.208 billion in March 2017, up by 77.34 per cent from $ 1.809 billion for the same month a year ago. An increase of 3.62 per cent was noted in the exports in March 2017 as compared with the corresponding period of a year ago while increase in imports was substantially higher, at 41.22 per cent. Exports increased to $1.801 billion in March 2017 from $1.738 billion for the same month a year ago while imports have increased to $ 5.009 billion from $ 3.547 billion a year ago.

Trade deficit in March 2017 was recorded at $ 3.208 billion, which was 15.35 percent higher from $ 2.781 billion for the previous month of February 2017.

An increase of 9.95 per cent in exports and 13.55 per cent in imports was recorded in March 2017 over the previous month. Exports increased to $ 1.801 billion in March 2017 over $ 1.638 billion in February 2017 while imports have soared to $ 5.009 billion as compared to $ 4.419 billion during the aforementioned period.

The government’s earnings are declining and cannot support the balance of payment position, the sources said, adding an increase in exports and foreign direct investment (FDI) is critical to supporting the balance of payment and meet the financial requirements of the country.