The trade deficit increased to USD 8.2 billion during the first 11 months of last year from USD 7.6 billion during the same period in the previous year, the Central Bank stated.
The trade deficit has been widening during the past three years with USD 7.5 billion in 2014, USD 7.6 billion in 2015 and USD 8.2 billion last year.
The low export turnover contributed to the widening of the trade deficit during the past three years. Earning from exports contracted by 2.7 percent year-on-year to USD 9.4 billion during the first 11 months of last year.Export earnings were affected by the low exports in transportations equipment, petroleum products and agricultural exports such as tea, spices and minor agricultural goods.
Export earnings have been on the decline since October 2014 to October 2016 which recorded a marginal increase of USD 855 million, a 0.9 percent growth from USD 847 million in October 2015.The low demand for commodities from importing countries particularly Europe and the Midlle East which are under turmoil had negative bearing on exports.Trade experts said domestic trade barriers such as procedural delays , delays due to security checks at the ports and BIA the are set backs for export competitiveness and market expansion.
Export earnings dropped despite the depreciation of the rupee by 3.8 percent last year. impacted the Meanwhile expenditure on imports increased by 1.7 percent (y-o-y) to USD 17.6 billion during the first 11 months of 2016. The import expenditure rose due to the high expenditure on intermediate and investment goods .The government had to seek an Extended Fund Facility from the International Monetary Fund last year to support the Balance of Payment which hit low due to the widening trade deficit.The Gross foreign reserves were recorded at USD 6 billion as at end 2016. The Central Bank projects that it would go up to around USD 7.4 billion by the end of the year.