Trade deficit narrows by 7% in first half of FY14

Trade deficit narrows by 7% in first half of FY14
AFP

KARACHI: Sufficient growth in exports and stable imports in Pakistan during the first half of current fiscal year 2013-14 (FY14) helped reduce the country’s trade deficit by 7.0 percent as compared to the same period of last fiscal, Pakistan Bureau of Statistics (PBS) reported on Wednesday.
Pakistan’s balance of trade for the first half of FY14 stood at negative $9.1 billion as compared to negative $9.8 billion in the same period of FY13, meanwhile, exports from the country rose to $12.6 billion in the first half of FY14 (July to December), registering a 5.11 percent increase over exports worth $12.1 billion in the corresponding period of last fiscal year.
However, imports in country decreased by 1.14 percent in the first half of FY14 to $21.7 billion as against $21.9 billion in corresponding period of last fiscal, PBS data said.
According to the PBS figures, the overall export growth went up massively on monthly basis by 15.54 percent in December 2013 when compared with exports of the same month in 2012.
The country exported goods worth $2.3 billion in December 2013 as against $1.9 billion in the same month of 2012-13. However, imports in the country during December FY14 went down by 3.02 percent to $3.6 billion as compared to imported goods of $3.7 billion in the corresponding month of FY13.
The country’s balance of trade for the month of December FY14 as compared to the same month of last fiscal contracted by 24 percent to a negative $1.3 billion at the end of the month under review as against negative $1.7 billion at the end of December FY13.
Meanwhile, on monthly sequential basis the exports from the country witnessed an exorbitant increase of 26.11 percent in December of FY14 to $2.3 billion when compared to the exports worth of $1.8 billion in the month of November FY14. 
Similarly, monthly sequential comparisons reveals that the country managed to import $3.5 billion worth of generalized items during the month of December 2013, representing 2.47 percent decline if compared to the import worth of $3.6 billion in the month of November 2013.
Consequently, on monthly basis the country’s trade imbalance narrowed by 28 percent in December FY14 against the previous month. The country’s trade deficit was recorded at negative $1.3 billion in December FY14 as compared to negative $1.8 billion in November FY14. 
With the recent obtainment of Generalised System of Preferences (GSP) Plus status from European Union, for the next 10 years it is expected that Pakistan would be able to reduce trade deficit significantly due to additional export of $1 billion per annum to the EU over the next three years.
However, the EU will again review the status after three years as the beneficial countries will ensure the implementation of 27 specified international conventions pertaining to human rights, labour rights, environment and good governance.
After obtaining GSP Plus from EU, textile sector is expected to be the major beneficiary. Analysts expect dishcloth/duster, knitted tracksuits-making units, weaving industry, towel, gloves and socks-making units to be the major exported commodities to EU. GSP Plus status is significant for Pakistan in order to enhance its textile exports.

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