Import bill may cross $27bn level by end of fiscal year
By Mubarak Zeb Khan
ISLAMABAD, April 14: Pakistan’s import bill is likely to cross $27 billion by the end of the current fiscal year owing to a rise in oil prices in the international market, putting more pressure on foreign exchange reserves.
Official figures released by the Federal Bureau of Statistics here on Friday showed that the import bill reached $20.693 billion in just nine months of the fiscal year 2005-06 as against $14.446 billion in the same period last fiscal year, showing an increase of 43.24 per cent.
With this increase in the import bill, trade deficit soared to $8.620 billion during nine months of this fiscal year as against $4.263 billion in the same period last year, indicating an increase of 102.19 per cent.
Commerce ministry officials told Dawn that the trade deficit would easily cross the $10 billion mark by the end of the current fiscal year as against the projected figure of $4.16 billion announced in the Trade Policy 2005-06. This will be the highest-ever trade deficit in the history of Pakistan.
The import bill in April-June of the fiscal year 2004-05 was $6.27 billion. This means that with an average 30 per cent growth in imports this year over the last year, the import bill is expected to reach $8.151 billion during the April-June period of the current fiscal year. With this the import bill would easily reach $28 billion by the end of the current fiscal year, added the officials.
According to the FBS figure, the trade deficit in March 2006 reached $1.164 billion as against $0.788 billion in the same month last year, an increase of 47.66 per cent.
The trade deficit stood at $1.740 billion in the fiscal year 1999-2000, $1.527 billion in 2000-01, $1.211 billion in 2001-02, $1.2 billion in 2002-03, $3.27 billion in 2003-04 and over $4 billion in the fiscal year 2004-05.
The officials said the high import bill would have a negative impact on the country’s forex reserves. As country’s exports rose by 18.56 per cent to $12.072 billion in nine months of this fiscal year as against $10.182bn in the same period last fiscal year.
The officials said that balance of payment was likely to be in a better position, as Pakistan raised $800 million from the global debt market by launching a sovereign bond coupled with $500 million received as a part of payment for PTCL from Etisalat. The UAE-based company also made another payment of $640 million recently.
The officials said that despite huge inflows privatization proceeds and foreign direct and portfolio investment, Pakistan would face a current account deficit of over $6 billion because of soaring trade deficit.
