ISLAMABAD, Oct 10: Pakistan’s trade deficit ballooned to all time high $5.549 billion during the first quarter of the current fiscal year up by 52.65 per cent from $3.635 billion over the corresponding period last year.

In September the trade deficit became worst as it grew by 62.13 per cent to $2.027 billion from $1.25 billion a year ago, and the country appears heading toward a balance of payments crisis unless relief arrives soon from the ‘Friends of Pakistan’.

The government imposed additional customs duty on more than 370 items to curtail flow of imports in a bid to reduce trade deficit this year. Last year, the trade deficit reached all time high of over $20 billion putting extra pressure on reserves.

Moreover, to reduce oil import bill Pakistan requested Iran on Friday to provide crude oil on deferred payment basis to ease the balance of payment position of Pakistan. Pakistan has already asked Saudi Arabia for a similar oil facility, but no agreement has reached so far.

Official figures released here on Friday by Federal Bureau of Statistics (FBS) showed export of goods up at a rate of 19.19 per cent to $5.269 billion during the first quarter (July-Sept) of the current fiscal year as against $4.420 billion over the same period of the last year.

The government has set an export target of $22.1 billion for the year 2008-09.

A similar trend in export growth was also observed during the month of September over the same month last year, indicating an upward growth. The growth trend in export showed that the international credit crisis has not so far impacted Pakistan’s export proceeds to United States and the 27-member European Union, the worst hit targets of current financial crisis.

Imports climbed by 34.29 per cent to $10.818 billion during the July-Sept period of the current fiscal year as against $8.056 billion over the same period of the last year. On monthly basis, the imports, however, grew much higher at 39.20 per cent to $3.806 billion in September against $2.734 billion over the corresponding month of last year.

Secretary Commerce Syed Asif Shah told Dawn that the robust growth in export proceeds was the result of continuous efforts by our business community to enhance exports despite the enormous local and international challenges that they are facing.

This growth is also the reflection of diversification in production, which is now yielding results, he said. However, the rupee depreciation also accelerated the growth in export proceeds during the period under review. Analysts said that the increase in import bill is constantly putting pressure on Pakistan’s forex reserves. The depleting reserves have also caused highest-ever depreciation of rupee. It has lost 21.7 per cent since the beginning of the year.

Eminent economist Dr Qaiser Bengali told Dawn that Pakistan needs $10 billion at the earliest from the ‘Friends of Pakistan’, which would stabilise economy.

The rising import bill is due to import of eatables, wheat, edible oil etc. The fiscal and current account deficits are unsustainable. Inflation is over 25 per cent and rising.

Former chief economist Dr Pervez Tahir said that the finance ministry has already taken three major steps for overcoming the economic crisis. These include phased withdrawal of oil subsidies, imposition of additional duty on luxury items and reduction in development expenditure.

Mr Tahir suggested that the government should not enter into an IMF programme, which, he said, would reduce room for maneuvering for the new political government. “Our economic team should tell the world that we will maintain budget deficit at 4.7 per cent as revenue witnessed more than expected growth in the first quarter,” he said.