2:11 AM
McGhori
ISLAMABAD: The commodities exports plunged for the third consecutive month in December 2011 as the continuing global recession shaved off demand from key markers like Europe and United States.
As a result, the country’s exports fell by 11.46 per cent in December to $1.854 billion as against $2.094 billion in the same month last year, suggested data of Pakistan Bureau of Statistics issued here on Wednesday.
Experts say the slowdown in exports will continue in the coming months because the demand from the key markets like European Union and United States is unlikely to revive.
The decline in exports is also witnessed in terms of rupee despite the fact that the massive depreciation of the rupee against the US dollar in the past few months up to December 31. This shows that the depreciation did not support Pakistani commodities to penetrate in the international markets.
However, the country’s overall exports registered a paltry growth of 3.90 per cent at $11.237 billion in the first half of this fiscal year against $10.815 billion in the same period last year.
Last year, the global price hike of commodities, especially of cotton based textile group pushed up the overall exports volume from the country by the end of June 2011.
The government has projected an export target of $25.618 billion for 2011-12. Going by the export performance in the past three months, Pakistan is unlikely to meet the export target.
As a result, trade deficit, the difference between merchandise exports and imports, now stands at $2.407 billion in December as against $1.657 billion in the same month last year because of declining exports and rising import bill.
The overall trade deficit reached to $11.476 billion in the first half (July-December) of this fiscal year as against $8.287 billion over the corresponding period last year, showing an increase of 38.48 per cent.
The slowdown in exports also exerting pressure on the balance of payments, as the pace of imports have also risen with the rising import bill of oil and eatables. The current account deficit in the first five months (July-November) surged to $2.104 billion compared to $589 million deficit recorded in the same period last year.
Even the rising flow of remittances failed to contain the ballooning current account deficit because of decline in export proceeds during the period under review.
On the other hand, import bill went up by 13.60 per cent to $4.261 billion in December as against $3.751 billion over the same month last year. And overall import bill now reached to $22.713 billion in the first half of 2011-12 as against $19.102 billion in the corresponding period last year, showing an increase of 18.90 per cent.
The government has projected import target at $42.910 billion in 2011-12.
Since January 2011, the trade deficit was improving against the corresponding months last year owing to buoyancy in monthly export growth combined with slowdown in imports until June 30, 2011.
But since then, a surge in demand has been witnessed for import of raw materials for the manufacturing sector. Main stimulus behind this industrial demand was the government’s recent decision to lower interest rates, which improved availability of credit to private sector.
For the current year, the government forecast a trade deficit at $17.292 billion as its rebounding economy raises demand for manufacturing and oil imports. The oil and eatable imports bill also expected to swell in the year 2011-12.
Posted in: BUSINESS
