ISLAMABAD - Pakistan’s trade deficit narrowed significantly during seven months (July-January) of the ongoing fiscal year 2012-2013 due to reduction in imports and a continuous growth in exports of non-traditional items.

The trade deficit shrank by 12 per cent to $11.617 billion during July to January period of the financial year 2012-2013 as against $13.209 billion of the corresponding period of last fiscal year, revealed the figures of Pakistan Bureau of Statistics (PBS) on Wednesday.

The continuous narrowing of the trade deficit is offsetting pressure on the country’s foreign currency reserves held by the State Bank of Pakistan. This relief, however, may prove temporary as the country is set to return $1.7 billion in loan repayments to the IMF in the remaining period of the current fiscal year, which experts believe will bring foreign exchange reserves under considerable pressure. Pakistan’s foreign exchange reserves dropped to $13.474 billion in the week ending Feb 1.

The PBS official data showed that the monthly trade deficit continued to shrink for the sixth consecutive month due to a fall in imports. The figures also suggested that exports registered an increase over the same period of the preceding year for the fifth month in a row. In the period under review, according to the PBS figures, country’s exports increased by 7.24 per cent on year-on-year basis. Pakistan exported goods worth $14.068 billion in July-January period of year 2012-2013 as compared to $13.118 billion of the corresponding period last year. On the other hand, imports plunged by 2.44 per cent to $25.685 billion in July-January period of ongoing financial year as compared to $26.327 billion of the corresponding period last year.

The government has fixed $27 billion exports target for the ongoing financial year 2012-2013, which seems to be challenging. Continued outages of electricity and non-supply of gas to export-oriented textile units have resulted in failure of Pakistani export orders.

Meanwhile, according to the PBS figures, the overall exports growth went up by 2.74 per cent in January 2013 if compared with exports of December 2012. The country exported goods worth of $2.023 billion in January 2013 against $1.969 billion of December 2012. However, the imports also showed growth of 2.48 per cent in January 2013 against December 2012, as the country imported goods worth of $3.763 billion during the last month as compared to $3.672 billion of December 2012. Therefore, the country’s trade imbalance increased by 2.17 per cent in January 2013 against that of December 2012. The country’s trade deficit was recoded at $1.740 billion in January 2013 against $1.703 billion of the December 2012.

According to the PBS figures, exports stood at $2.023 billion in January 2013, which were $1.916 billion in January 2012 and this showed an increase of 5.58 per cent in exports in one year. Imports increased by 3.12 per cent and were recorded at $3.763 billion in January 2013 against $3.649 billion of January 2012. The trade deficit for January 2013 against January 2012 increased by 0.40 per cent and was recorded at $1.740 billion.