Pakistan’s trade deficit increased to $17.92 billion during the first 10 months of the current fiscal year 2014-15 indicating that this huge amount went out of economy on excess imports.
This deficit figure was exactly $2 billion less than the value of products it sold abroad during this period, which the economists believe could put pressure on the country’s balance of payment.
Exports stood at $19.92 billion during July-April 2014/15, while imports were recorded at whooping $37.85 billion. This year’s trade deficit figure was 11.28 percent more than what the economy accumulated ($16.1 billion) a year ago, the Pakistan Bureau of Statistics (PBS) reported on Monday.
Overvaluation of the rupee and high interest rate were the instrumentals behind sluggish Pakistani exports, economists believe. They say due to high interest rate, Pakistani companies were unable to borrow from banks nor the banks were quick to lend money to them, the reason being the commercial banks’ interest in government papers (PIBs).
Over the last few years, the banks have heavily invested in PIBs, while giving a cold shoulder to the investors or companies.
The State Bank’s latest figures also indicate that over the last 10 months, credit to private sector has reduced by 37 percent to Rs 195.2 billion.
