ISLAMABAD - Pakistan's trade deficit widened by 5.5 percent during first nine months (July-March) of the ongoing financial year.

Trade imbalance, gap between exports and imports, was registered at $1.85 billion in March 2016 as against $1.51 billion of February, showing an increase of 22.41 percent.

Trade deficit was recorded at $16.9 billion during July-March of year 2015-2016 as against $16 billion of the corresponding period of the previous year, according to the latest data of Pakistan Bureau of Statistics. The country's imports went down by 4.22 percent to $32.5 billion from $33.9 billion of the previous year. Meanwhile, exports reduced by 12.92 percent to $15.6 billion during July-March of the ongoing fiscal year from $17.9 billion of the same months of the last year.

According to the PBS data, exports showed decrease of 2.74 percent in March 2016 as against its preceding month of February. The country exported goods worth $1.74 billion in March as against $1.79 billion of February 2016. However, the imports went up by 8.78 percent to $3.6 billion in March 2016 from $3.3 billion of February 2016.

Pakistan, in letter of intent written to International Monetary Fund (IMF), stated that country's exports are declining during ongoing financial year, reflecting lower commodity prices, ongoing energy shortages, security and business climate challenges, the weak cotton harvest, and the continued appreciation of the real effective exchange rate. Meanwhile, the IMF noted that Pakistan's current account deficit is expected to remain at about 1 percent of GDP this fiscal year as the lower oil import bill is partly offset by falling exports. Growth in non-oil imports, in part linked to the weak cotton harvest, and a more moderate growth in remittances are also weighing on the current account. Gross international reserves have been steadily increasing and stood at $15.9 billion in December 2015, covering four months of imports. Further progress remains warranted and is expected with reserves projected to reach $17.5 billion by end-FY2015/16. The government had recently announced much delayed Strategic Trade Policy Framework (2015-2018) to enhance country's exports to $35 billion by the end of June 2018. Last fiscal year, the exports were recorded at $25 billion. The government set unrealistic exports target amid improving export competitiveness, increasing share in regional trade, transition from factor driven economy to efficiency-driven and innovation driven economy.