The details of trade account for the just-concluded FY12 stood quite disappointing as during the year totally missed the budgetary targets breaching to $ 21.3bn deficit or 9.7% of GDP compared to the target of $ 14.5bn. The trade deficit widened up by 36%YoY against FY11 deficit of $15.6bn.
The exports for FY12 went down by 4.7%YoY to $23.6bn compared to $24.8bn witnessed last year. Whereas, a considerable growth of 11%YoY was witnessed in imports which stood at $44.9bn during the year against $40.4bn witnessed a year earlier.
“These high figures for trade deficit are primarily due to the enormous surge in international oil prices (Arab Light) by 19%YoY during FY12 resulting in swelling of imports as oil imports contains 34% weightage in the total import bill, huge fertilizer imports amounting $1.1bn (up 112%YoY) during Jul-May 2012, the massive decline in the textile export as cotton prices went down by 35%YoY during FY12 which reduce the export value in USD term of the country and electricity and gas load shedding also denting the export of the country,” viewed a report issued by the InvestCap Research Wednesday. On monthly basis, the report said, the country’s total exports declined by 0.83%MoM to $2.1bn during Jun-12 while imports of the country surged by 2.3%MoM resulting to widen the trade deficit to USD1.8bn, up by 6.12%MoM during the same period. Similarly, during Jun-12 trade deficit increased by 27.6%YoY as compared to June-11deficit of USD1.4bn. Whereas export has got down by 11.6%YoY stood at USD2.1bn while imports increased by 3%YoY to USD3.98bn.
Yet another remarkable year for worker’s remittances as overseas Pakistanis sent $13bn to Pakistan during FY12 compared to the remittances of last year’s $11.2bn, registering a phenomenal growth of 18%YoY.
During the month of June-12, the remittances stood at $1.11bn, down by 6.3%MoM while up 1%YoY, workers residing in GCC countries contributed the highest chunk of 60.8% during June-12 (60.9% during FY12), remittances from USA contributed 18.5% during the month (17.5% during FY12) while remittances form European countries contributed 14.1% during the month (14.3% during FY12).
However, comparing the monthly averages except for the months of Sept-11 (US$890.42mn) and Nov-11 (US$924.92mn), the remittances remained above $1bn each month during remaining 10 months of the year, compared to monthly average of $933mn registered during FY11.
Going forward, the report said, the declining trend of international oil and commodity prices could potentially result in trade numbers delivering some relief in 1QFY13. Also improvement in Pak-US relationship could be a key positive development for re-initiation of CSF program and other civilian and military aid foreign flows which will decrease the pressure on country’s external account.
“Given our major dependency for remittances over GCC economies, we expect this impressive growth in workers’ remittances will also continue to embark for FY13 as oil based GCC economies are expected to remain strong,” it concluded.
