Q1 trade deficit widens to $3.15-bn

17 Oct '06

3 min read

The first quarter external trade figures released here on Thursday showed that the trade deficit was wider than the corresponding period of previous year as exports grew at a much lower rate than imports.

The export during July-September rose by just 2.8 per cent to fetch a total $4.269 billion. The government has set an export target of $18.6 billion for the current year 2006-07.

The import grew by 30.3 per cent to reach $7.429 billion during the quarter. This high import growth resulted in trade deficit of $3.159 billion or 57 per cent.

This trade deficit was also higher than last year. The trade deficit of first quarter 2005-06 was $2.399bn. This quarter trade deficit increased by $760m or 31.6 per cent over last year's trade deficit during the same period.

The figure showed that the trade deficit was high mainly because of low export growth as the rate of import growth last year was higher than this year.

The export grew by 13.1 per cent last year which concluded with a total export figure of $17.4 billion for 2005-06. Though the government did not set any ambitious export target for the current year, but the rate of low export growth could create problem to hit the target.

Expert said that the import would grow less than the last year as there was a declining trend in the import of machinery. The main importer of machinery was the textile sector which has almost restructured its existing facilities.

However, the last year's higher import was also because of high oil prices while this year the oil prices have slipped from $78 per barrel to $56 per barrel.

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