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Trade deficit shoots up 34% to $10.45b against $7.75b, ICCI shows great concern

Trade deficit shoots up 34% to $10.45b against $7.75b, ICCI shows great concern

ISLAMABAD: Islamabad Chamber of Commerce and Industry has shown great concerns over the rising trade deficit of the country and called upon the government to take urgent measures to facilitate private sector in promoting trade and exports in order to overcome the trade deficit issue.

Addressing a meeting of businessmen, Islamabad Chamber of Commerce and Industry Acting President Muhammad Shakeel Munir said that the trade deficit has surged to $10.45 billion during the first five months of the financial year 2014-15 showing an increase of over 34 percent in the same period of last year. He said such state of affairs indicates that country’s exports are not growing well and he urged the government to take all necessary steps to address the key issues of exporters like energy, lack of infrastructure development, bureaucratic hurdles and institutional rigidities etc in order to facilitate them in improving the country’s trade and exports. Munir said the government has set annual exports target of $27 billion, but the record of first five months of the current fiscal year shows average monthly exports growth of just $1.984 billion which is unsatisfactory by all standards. He warned that if this low growth trend of exports persisted, achieving the stipulated exports target would become more difficult and the situation would put more pressure on the country’s balance of payments leading to a further rise in fiscal deficit.

The ICCI acting president said that one good option to overcome rising trade deficit was to focus on strengthening inter-regional connectivity as it would create more business opportunities for Pakistan in the regional countries and help in enhancing regional trade. Munir said the government should also consider developing a comprehensive strategy to evolve knowledge-based economy according to modern trends which would facilitate in enhancing trade with regional countries as well as internationally.

Munir said the government should also provide necessary support to industry in improving production techniques, cutting down on wastages and should encourage clusters of small and medium size export units to bring down production cost as well as make exports globally competitive. He said private sector should be helped in diversification of exports and producing high quality value-added products, which would lead to taking a quantum leap in exports and reduce trade deficit.

Meanwhile, Trade deficit widened to $10.45 billion during five months of (July-November) 2014 against $7.75 billion over the corresponding period of last year, soaring up 34.78 percent.

According to the statics of the Pakistan Bureau of Statistics (PBS), on monthly basis, however, the trade deficit decreased 10.30 percent in November over the corresponding month of last year.

Since July 2014, imports has rebounded and witnessed a consistent growth.

In July-Nov 2014, imports reached $20.37 billion against $18.11 billion over the corresponding period of last year, reflecting an increase of 12.50 percent.

But a negative growth of 0.58 per cent was witnessed in the month of November 2014 over the corresponding month of last year.

Last year, imports witnessed a marginal growth of 0.36 per cent to $45.11 billion in July-June 2014 from $44.95 billion over the corresponding months of last year.

Contrary to this, exports witnessed a negative growth of 4.19 per cent, as its value fell to $9.92 billion in July-Nov period this year as against $10.35 billion over the corresponding months of last year.

But exports witnessed a growth of 9.47 per cent in November 2014 from a year ago sending a hope of revival in exports proceeds in the next few months.