ISLAMABAD - Pakistan’s trade deficit widened by over 45 per cent during the first quarter (July-September) of the ongoing financial year (FY2015) due to the continuous decline in the country’s exports and ever-rising growth in imports.

The country’s trade imbalance, gap between exports and imports, was recorded at $6.504 billion during July-September of FY2015 as against $4.482 billion of the corresponding period previous year, showing a growth of 45.11 per cent, according to the Pakistan Bureau of Statistics (PBS). The trade deficit is continuously increasing as exports are decreasing and imports are enhancing from last several months.

Exports went down by 10.16 per cent to $6.015 billion in July-September of FY 2015 from $6.695 billion of the corresponding period previous year. However, imports went up by 12.01 per cent to $12.519 billion in the period under review from $11.177 billion of previous year. Therefore, the country’s trade imbalance remained $6.504 billion during July-September FY2015 as against $4.482 billion of the corresponding period previous year.

The PML-N government had failed to enhance the exports despite getting GSP Plus status from the European Union January this year. Pakistan’s exports had registered negative growth in last six months out of nine months since the country got GSP Plus status. The industrialists and exporters blamed the government for not taking maximum advantage from the GSP Plus status by not providing uninterrupted power supply to the industrial units. The government, in the Economic Survey 2013-2014, stated that it was estimated that due to GSP Plus there would be an increase of more than $1 billion worth of exports to EU.

Even, the recent rupee depreciation against the US dollar also failed to enhance the exports in last few months. The rupee has lost it value by 4-5 level during August due to the political uncertainty that emerged after the sit-ins of Pakistan Tehreek-I-Insaf (PTI) and Pakistan Awami Tehreek (PAT) in federal capital. Normally, exports enhance due to the rupee depreciation.

The government might struggle to achieve its targets of exports and imports set in the Annual Plan 2014-2015. The government had projected a 5.8% growth in exports and 6.2% rise in imports for the current fiscal year. Imports have been projected at $44.2 billion against exports at $26.99 billion, showing a trade gap of $17.2 billion. Any shortfall in exports and higher imports will cause problems for the government in financing the current account deficit. The current account deficit for this year has been estimated at $2.8 billion (1.1%) of the GDP (gross domestic product).

MONTH ON MONTH

According to the PBS data, exports registered an increase of 14.13 percent, as country exported goods worth $2.181 billion in September 2014 as against $1.911 billion of its previous month of August 2014. However, the imports recorded decline of 3.33 per cent, as imports stood at $4.561 billion in September 2014 as compared to $4.718 billion of the August 2014. Therefore, the trade deficit has shown decline of 15.21 per cent, as it was recorded at $2.38 billion in September 2014 as against $2.807 billion of August 2014.

YEAR ON YEAR

Meanwhile, the Pakistan Bureau of Statistics suggested that exports went down by 16.66 percent in September 2014 as against exports of the same month of the previous year. Exports were recorded at $2.181 billion in September 2014 as compared to $2.617 billion of September 2013. However, the imports recorded massive increase of 20.31 percent, as imports were registered at $4.561 billion in September 2014 against $3.791 billion of September 2013. Therefore, the trade imbalance was recorded at $2.38 billion in September 2014 as compared to $1.174 billion of September 2014, showing an increase of 102.73 percent.