Source: http://dawn.com/2008/04/12/ebr5.htm
By Mubarak Zeb Khan
ISLAMABAD, April 11: Trade deficit hit an all-time high of $14.486 billion in the first nine months of the current fiscal year, up by 44.27 per cent from $10.041 billion recorded last year, mainly due to surging oil prices and high import of consumer items.
The deficit exceeded the exports of $13.476 billion.
The gap widened as the import of mobile phones, gold, luxury vehicles, perfumes, cosmetics, bullet proof vehicles etc penetrated the local market due to changing lifestyles.
The import bill of wheat and palm oil witnessed highest-ever increase due to rise in their prices in the international market.
The trade deficit escalated to $13.54 billion in 2006-07 from $1.412 billion in 1999-2000. The trend shows that the trade deficit in the current fiscal year will cross the figure of $20 billion putting an extensive pressure on the balance of payments.
If the non-debt creating inflows -- foreign direct investment, portfolios investment, GDRs and grants -- did not match the gap, the new government will be left with no option but to seek debts from donor agencies and domestic sources for financing the balance of payments.
Official figures released on Friday by the Federal Bureau of Statistics (FBS) showed that the import bill increased by 24.73 per cent to $27.962 billion in July-March 2007-08, against $22.419 billion last year. It witnessed an alarming increase of 45.78 per cent in March 2008 when it stood at $3.823 billion against $2.622 billion in the same month last year.
Exports grew by 8.87 per cent to $13.476 billion in July-March against $12.377 billion last year. The export growth recorded the highest-ever increase of 17.29 per cent in March 2008. This growth was the second straight in a row in the current fiscal year, which is unprecedented because the average growth over the past two years has been six per cent per month.
Analysts said the government should rationalise duty and taxes to regulate imports of the luxury items.
They say government should also focus on the value-added sector and diversify the export base instead of focusing on textile sector which is fetching maximum financial support.
With the rising oil bill, it is expected that the import bill will cross the figure of $36 billion by the end of June 2008. Last year the import bill was around $30 billion.
The export target of $19.2 billion has now become a far cry as the textile exports are steadily on the decline for last few months despite doling out huge subsidies from the national kitty. 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.
Due to this highest-ever trade deficits in goods and services the current account deficit has also reached an alarming level. The current account deficit will cross over $10 billion by the end of June 2008. Last year the current account deficit was $8.114 billion from over $500 million of 1999-2000.
Saturday, April 12, 2008
Thursday, April 10, 2008
Budget deficit exceeds Rs 195 billion up to February: Finance Minister
Source: http://geo.tv/4-10-2008/16580.htm
Thursday, April 10, 2008
ISLAMABAD: Federal finance minister Ishaq Dar has termed the statistics given by the former government false regarding economic growth rate and said that the present government would revive the economy through some strict measures.
He said that despite tough challenges, the government would bring the monetary deficit to the manageable limit of six per cent by reducing it from about 10 per cent within 2 ½ months.
Ishaq Dar said that the present government has inherited the very weak economy full of debts and the bank borrowings would be thoroughly made limited.
He was addressing a joint press conference with federal information minister Sherry Rehman after the federal cabinet’s second meeting under prime minister Syed Yousuf Raza Gilani at the prime minister’s secretariat on Wednesday.
The finance minister provided the federal cabinet a detailed balance sheet of the national economy up to March 31, 2008.
Prime minister had given two weeks time to the ministry of finance for preparation of the balance sheet but the economic team headed by the finance minister worked day and night and prepared the balance sheet within just eight days.
Ishaq Dar said that we believe in transparency and until the government would not tell the facts to the people no solution of the issues would be achieved.
Presenting the facts and figures, he said that debts of Rs.2,946 billion were achieved from 1947 to 1999 while Rs.2,749 billion were borrowed from 1999 to 2008.
He told that the government debts valued at Rs.2,946 billion up to June 1999 and it went up to Rs.5,280 billion up to March 2008 besides an aid of 300 million dollars from Saudi Arabia.
The finance minister told that despite heavy increase in the world prices of oil the former government did not use the formula of automatic adjustment due to which a heavy subsidy of Rs.138.6 billion on petroleum products has been kept in the present budget but it does not include any provision.
Thursday, April 10, 2008
ISLAMABAD: Federal finance minister Ishaq Dar has termed the statistics given by the former government false regarding economic growth rate and said that the present government would revive the economy through some strict measures.
He said that despite tough challenges, the government would bring the monetary deficit to the manageable limit of six per cent by reducing it from about 10 per cent within 2 ½ months.
Ishaq Dar said that the present government has inherited the very weak economy full of debts and the bank borrowings would be thoroughly made limited.
He was addressing a joint press conference with federal information minister Sherry Rehman after the federal cabinet’s second meeting under prime minister Syed Yousuf Raza Gilani at the prime minister’s secretariat on Wednesday.
The finance minister provided the federal cabinet a detailed balance sheet of the national economy up to March 31, 2008.
Prime minister had given two weeks time to the ministry of finance for preparation of the balance sheet but the economic team headed by the finance minister worked day and night and prepared the balance sheet within just eight days.
Ishaq Dar said that we believe in transparency and until the government would not tell the facts to the people no solution of the issues would be achieved.
Presenting the facts and figures, he said that debts of Rs.2,946 billion were achieved from 1947 to 1999 while Rs.2,749 billion were borrowed from 1999 to 2008.
He told that the government debts valued at Rs.2,946 billion up to June 1999 and it went up to Rs.5,280 billion up to March 2008 besides an aid of 300 million dollars from Saudi Arabia.
The finance minister told that despite heavy increase in the world prices of oil the former government did not use the formula of automatic adjustment due to which a heavy subsidy of Rs.138.6 billion on petroleum products has been kept in the present budget but it does not include any provision.
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