Deficit widens to Rs24b in July

Pakistans trade deficit widened by 24 per cent in July as import growth surpassed the growth in exports, and the State Bank may be compelled to take measures aimed at curtailing import demand if the trend continues. The gap between exports and imports widened to $1.45 billion in July, according to the Federal Bureau of Statistics on Thursday. The trade deficit was recorded at $1.17 billion last July. The last six months statistics took the experts by surprise as exports grew at an average of 14.5 per cent and the average growth of imports remained at 18.5 per cent during the same period. They say that if the trend persists in coming months it would widen the current account deficit, the gap between total international receipts and payments. Imports in July surged to $3.23 billion, an increase of $599 million over the imports of July 2009, showing a growth of 22.7 per cent. Exports to the rest of the world stood at $1.78 billion, which were $320 million or 21.8 per cent more than the exports in July 2009. The imports for the commodities sector were on the rise as compared to the machinery sector. The government has remained unable to announce the trade policy for the current financial year 2010-11, which started on July 1. Reports suggest that the government is likely to fix the export target at $21.3 billion, a projected growth of 10 per cent over the exports of last year. In 2009-10, exports amounted to $19.3 billion. This year imports are likely to remain around $39 billion. Last year, imports were registered at $34.7 billion.