ISLAMABAD, March 10: Pakistan’s trade deficit ballooned to $12.433 billion in the first eight months of the current fiscal year, up by 39.05 per cent over $8.942 billion recorded last year, mainly due to surging crude oil and food prices.

The gap widened as the import of edible items, particularly wheat witnessed highest-ever increase. At the same time, the import bill of luxury items — mobile phones, gold and cars — also increased the deficit during the period.

Official figures released on Monday by the Federal Bureau of Statistics (FBS) showed that the import bill increased by 21.95 per cent to $24.141 billion in July-February 2007-08, against $19.796 billion last year. It witnessed an alarming increase of 42 per cent in February 2008 when it stood at $3.659 billion against $2.572 billion in the same month last year.

Exports grew by 7.86 per cent to $11.707 billion in July-Feb 2007-08 against $10.854 billion last year. The export growth recorded the highest-ever increase of 22.25 per cent in February 2008. This growth was unprecedented because the average growth over the past two years has been six per cent per month.

With the rising import bill, economists believe, the trade deficit this year could cross $15 billion, the highest-ever increase recorded in the country’s history. Last year, the deficit for the whole year was $13 billion.

Analysts said the export growth in February would mitigate to some extent the stress on foreign exchange reserves. However, it is necessary to maintain the same growth in the next four months (March-June).

“I am encouraged that despite many problems faced by the business community, exports have recorded an impressive growth,” Commerce Secretary Syed Asif Shah told Dawn on Monday.

He said this growth was the reflection of the consistency in the export-led polices of the government over the past couple of years and manifestation of the hard work and commitment of the business community.

The government had projected an ambitious export target of $19.2 billion in the trade policy last year. The target was projected by former prime minister Shaukat Aziz in cabinet meeting on the assurance from the former textile minister Mushtaq Cheema that textile exports would fetch an additional $1 billion.

However, contrary to the assurance the textile and clothing exports are on the decline despite huge subsidies doled out to the sector. For achieving the target, export proceeds should be in the vicinity of $7.493 billion over the next four months (March-June). There is, however, no indication that the commerce ministry would even be close to the projected target.

As the food inflation recorded the highest-ever increase, the government was compelled to slap a ban on export of certain food commodities to avert domestic shortages.

On the other hand, although the government has not set any import target in the trade policy, there are estimates that it may reach around $35 billion by the end of June. Last year, the import bill had exceeded $30 billion.