ISLAMABAD, Dec 12: Trade deficit in merchandise trade fell by over nine per cent in the first five months of the current fiscal year, from a year ago as imports dropped, while exports witnessed a growth.

In absolute terms, the trade deficit narrowed down to $8.168 billion in July-Nov period this year, as against $9.069 billion over the corresponding period of last year, suggested data of the Pakistan Bureau of Statistics (PBS) released on Wednesday.

Since October 2012 the imports are steadily on decline, while exports rebounded because of a slight surge in demand from recession-hit key markets of Europe and United States.

Exports rose by 7.85 per cent between July and November while imports declined 0.91 per cent.

On monthly basis, in November exports posted a growth of 23.68 per cent, and imports dipped by 2.33 per cent.

The declining trend in imports shows that the cost of imports increased because of massive depreciation of the rupee, which in return restricted demand for imported goods as well.

Trade deficit swelled to $21.271 billion in 2011-12 from $15.604 billion in the previous year, mainly driven by import of consumer goods and higher international crude oil prices.

For 2012-13, the government has projected trade deficit at $17.126 billion, which reflects low demand from manufacturing side.

Statistics show that exports rose to $10.082 billion in July-Nov from $9.348 billion in the corresponding period last year, showing an increase of 7.85 per cent.

In 2011-12, exports stood at $23.641 billion as against $24.810 billion in the previous year, a decline of 4.71 per cent.

For the current fiscal year, government projected export proceeds at $25.618 billion.

The increase in exports is mainly driven by textile and clothing sectors.

The output in textile and clothing sector has increased because of unabated supply of gas and electricity to the sector in the last few months.

Similarly, an increase in demand was witnessed because of spillover effect from China and Taiwan’s labour issue.

The implementation of preferential package of 75 products imports from Pakistan along with announcement for GSP plus scheme by Brussels also encouraged European buyers to re-develop contacts in Pakistan.

Import bill declined by 0.91 per cent to $18.250 billion in July-November 2012 from $18.417 billion over the same months last year.

On monthly basis, imports declined by 2.33pc to $3.607 billion in November from $3.693 billion over the corresponding month last year.