Economy
Pakistan is the third fastest growing major economy after China and India in Asia. With the world's sixth-largest population, Pakistan is developing a highly-skilled labour force, with business friendly policies. Economic growth (6-7%) and foreign investment are increasing day-by-day. At purchasing power parity, Pakistan's GDP in 2007 was $475.5 billion. The World Bank classifies Pakistan as a low-income economy.
The Economy Today
Stock Market
In the first four years of the twenty-first century, Pakistan's KSE 100 Index was the best-performing stock market index in the world as declared by the international magazine 'Business Week'.
The stock market capitalisation of listed companies in Pakistan was valued at $45,937 million in 2005 by the World Bank. As a result, the corporate sector of Pakistan has grown dramatically in significance in recent times.
Manufacturing and Finance
Pakistan's manufacturing sector has experienced double-digit growth in recent years, with large-scale manufacturing growing by 18% in 2003. A reduction in the fiscal deficit has resulted in less government borrowing in the domestic money market, lower interest rates and an expansion in private sector lending to businesses and consumers. Foreign exchange reserves continued to reach new levels in 2003, supported by robust export growth and steady worker remittances.
Poverty Alleviation Expenditures
Pakistan government spent over 1 trillion Rupees (about $16.7 billion) on poverty alleviation programs during the past four years, cutting poverty from 35 percent in 2000-01 to 24 percent in 2006. Rural poverty remains a pressing issue, as development there has been far slower then in the major urban areas.
Growing Middle Class
Measured by purchasing power, Pakistan has a 30 million strong middle class, according to Dr. Ishrat Husain, Ex-Governor (2 December 1999 - 1 December 2005) of the State Bank of Pakistan. It is a figure that correlates with research by Standard Chartered Bank which estimates that Pakistan possesses a "a middle class of 30 million people that Standard Chartered estimates now earn an average of about $10,000 a year". In addition, Pakistan has a growing upper class with relatively high per capita incomes.
On measures of income inequality, the country ranks slightly better than the median. In late 2006, the Central Board of Revenue estimated that there were almost 2.8 million income-tax payers in the country.
Employment
The high population growth in the past few decades has ensured that a very large number of young people are now entering the labour market. Among the seven most populous Asian nations, Pakistan has a lower population density than Bangladesh, Japan, India and the Philippines. In the past, excessive red tape made firing, and consequently hiring, difficult. Significant progress in taxation and business reforms has ensured that many firms now are not compelled to operate in the underground economy.
In late 2006, the government launched an ambitious nationwide service employment scheme aimed at disbursing almost $2 billion over five years.
Revenue
The Board of Revenue has collected nearly Rs 700 billion (US$11.6 billion ) in taxes in the 2005-2006 financial year.
Structure of Economy
From modest beginnings, Pakistani economy has moved successfully to a low-inflation high-growth trajectory since 2000. The central bank has controlled inflation at around 3% per annum in recent years - a record since 1980.
In 1947, when Pakistan became independent, agriculture accounted for about 53% of its GDP. While per-capita agricultural output has grown since then, it has been outpaced by the growth of the non-agricultural sectors, and the share of agriculture has dropped to 22% of Pakistan's economy.
In recent years, the country has seen rapid growth in industries (such as apparel, textiles and cement) and services (such as telecommunications, transportation, advertising, and finance).
1. Agriculture Sector
Pakistan ranks fifth in the Muslim world and twentieth worldwide in farm output. It is the world's fifth largest milk producer.
Pakistan's principal natural resources are arable land and water. About 25% of Pakistan's total land area is under cultivation and is watered by one of the largest irrigation systems in the world. Pakistan irrigates three times more acres than Russia. Agriculture accounts for about 22% of GDP and employs about 42% of the labour force.
Pakistan is a net food exporter, except in occasional years when its harvest is adversely affected by droughts. Pakistan exports rice, cotton, fish, fruits, and vegetables and imports vegetable oil, wheat, cotton, pulses and consumer foods. The country is Asia's largest camel market, second-largest apricot and ghee market and third-largest cotton, onion and milk market.
The economic importance of agriculture has declined since independence, when its share of GDP was around 53%. Following the poor harvest of 1993, the government introduced agriculture assistance policies, including increased support prices for many agricultural commodities and expanded availability of agricultural credit. From 1993 to 1997, real growth in the agricultural sector averaged 5.7% but has since declined to about 4%. Agricultural reforms, including increased wheat and oilseed production, play a central role in the government's economic reform package.
Much of the Pakistan's agriculture output is utilised the country's growing processed-food industry. The value of processed retail food sales has grown 12 percent annually during the Nineties and was estimated at over $1 billion in 2000 though supermarkets accounted for just over 10% of the outlets.
Crops
The most important crops are wheat, sugarcane, cotton and rice, which together account for more than 75% of the value of total crop output.
Pakistan's largest food crop is wheat. In 2005, Pakistan produced 21,591,400 metric tons of wheat, more than all of Africa (20,304,585 metric tons) and nearly as much as all of South America (24,557,784 metric tons), according to the FAO.
The Federal Bureau of Statistics provisionally valued major crop yields at Rs.504,868 million in 2005, thus registering over 55% growth since 2000 while minor crop yields were valued at Rs.184,707 million in 2005, thus registering over 41% growth since 2000.
Livestock
According to the Economic Survey of Pakistan, the livestock sector contributes about half of the value added in the agriculture sector, amounting to nearly 11 per cent of Pakistan's GDP.
The leading daily newspaper Jang reports that the national herd consists of 24.2 million cattle, 26.3 million buffaloes, 24.9 million sheep, 56.7 million goats and 0.8 million camels. In addition to these there is a vibrant poultry sector in the country with more than 530 million birds produced annually. These animals produce 29.472 million tons of milk (making Pakistan the 5th largest producer of milk in the world), 1.115 million tons of beef, 0.740 million tons of mutton, 0.416 million tons of poultry meat, 8.528 billion eggs, 40.2 thousand tons of wool, 21.5 thousand tons of hair and 51.2 million skins and hides.
The Food and Agriculture Organization reported in June 2006 that in Pakistan, the world's fifth largest milk producing country, government initiatives are being undertaken to modernise milk collection and to improve milk and milk product storage capacity.
The Federal Bureau of Statistics provisionally valued this sector at Rs.758,470 million in 2005, thus registering over 70% growth since 2000.
Fishery
Fishery plays an important role in the national economy. It provides employment to about 400,000 fishermen directly. In addition, another 500,000 people are employed in ancillary industries. It is also a major source of export earning. In July-May 2002-03 fish and fishery products valued at US$117 million were exported from Pakistan. Federal Government is responsible for fishery of Exclusive Economic Zone of Pakistan.
The Federal Bureau of Statistics provisionally valued this sector at Rs.18,290 million in 2005, thus registering over 10% growth since 2000.
Forestry
The Federal Bureau of Statistics provisionally valued this sector at Rs.25,637 million in 2005, thus registering over 3% decline since 2000.
2. Industry Sector
Pakistan ranks thirteenth in the Muslim world and fifty-fifth worldwide in factory output.
Pakistan's industrial sector accounts for about 26% of GDP. Cotton textile production and apparel manufacturing are Pakistan's largest industries, accounting for about 66% of the merchandise exports and almost 40% of the employed labour force. Other major industries include cement, fertilizer, edible oil, sugar, steel, tobacco, chemicals, machinery and food processing.
The government is privatizing large-scale parastatal units, and the public sector accounts for a shrinking proportion of industrial output, while growth in overall industrial output (including the private sector) has accelerated. Government policies aim to diversify the country's industrial base and bolster export industries.
Manufacturing
In FY 2002-03, real growth in manufacturing was 7.7%. In the twelve months ending 30 June 2004, large-scale manufacturing grew by more than 18% compared to the previous twelve-month period. The textile and garment industry's share in the economy along with its contribution to exports, employment, foreign-exchange earnings, investment and value added make it Pakistan's single largest manufacturing sector. The industry is comprised of 453 textile mills: 50 integrated units; and 403 spinning units, with 9.33 million spindles and 148,000 rotors. The capacity utilization was 83% for spindles and 47% for rotors during 2003.
The Federal Bureau of Statistics provisionally valued large-scale manufacturing at Rs.981,518 million in 2005, thus registering over 138% growth since 2000 while small-scale manufacturing was valued at Rs.356,835 million in 2005, thus registering over 80% growth since 2000.
Mining and Quarrying
Important minerals found in Pakistan are gypsum, limestone, chromites, iron ore, rock salt, silver, gold, precious stones, gems, marble, copper, coal, graphite, sulphur, fire clay and silica. The salt range in Punjab Province has large deposits of pure salt. Balochistan province is a mineral rich area having substantial mineral, oil and gas reserves which have not been exploited to their full capacity. The province has significant quantities of copper, chromite and iron, and pockets of antimony and zinc in the south and gold in the far west. Natural gas was discovered near Sui in 1952, and the province has been gradually developing its oil and gas projects over the past fifty years.
Major reserves of copper and gold in Balochistan's Rekodiq area have been discovered in early 2006. The Rekodiq mining area has proven estimated reserves of 2 billion tons of copper and 20 million ounces of gold. According to the current market price, the value of the deposits has been estimated at about $65 billion, which would generate thousands of jobs.
The discovery has ranked Rekodiq among the world's top seven copper reserves. The Rekodiq project is estimated to produce 200,000 tons of copper and 400,000 ounces of gold per year, at an estimated value of $1.25 billion at current market prices. The copper and gold are currently traded at about $5,000 per ton and $600 per ounce respectively in the international market.
North West Frontier Province accounts for at least 78% of the marble production in Pakistan.
The Federal Bureau of Statistics provisionally valued this sector at Rs.211,851 million in 2005, thus registering over 99% growth since 2000.
Construction
After the devastating 2005 Kashmir earthquake, Pakistan has instituted stricter building codes. The cost of construction in Pakistan will increase 30 to 50% due to implementation of a new building code which requires strengthening of structures to withstand earthquake of 8 to 8.5 magnitude. The demand for cement has increased due to reconstruction after the earthquake. The prices of cement has increased by 50% and Pakistan government banned export of cement to lower the prices and the reconstruction costs.
Dubai Ports World, announced on June 1, 2006 that it will spend $10 billion to develop transport infrastructure and real estate in Pakistan. Dubai Ports World is also discussing the possibility of the company taking over operational management of Gwadar port in Balochistan.
Emaar Properties, announced on May 31, 2006 three real estate developments in the cities of Islamabad and Karachi in Pakistan. The projects, with a total investment of $2.4 billion, will include a series of master planned communities that will set new benchmarks in commercial, residential and retail property within Pakistan. In addition the conglomerate signed a unprecedented $43 billion deal to develop two island resorts - Bundal Island and Buddo Island - over the next decade.
The Federal Bureau of Statistics provisionally valued this sector at Rs.178,819 million in 2005, thus registering over 88% growth since 2000.
Electricity, Gas and Water
Pakistan has extensive energy resources, including fairly sizable natural gas reserves, some proven oil reserves, coal (the fourth-largest reserves in the world), and a large hydropower potential. However, the exploitation of energy resources has been slow due to a shortage of capital and domestic political constraints. Domestic petroleum production totals only about half the country's oil needs, and the need to import oil has contributed to Pakistan's trade deficits and past shortages of foreign exchange.
The current government has announced that privatisation in the oil and gas sector is a priority, as is the substitution of indigenous gas for imported oil, especially in the production of power. Pakistan is a world leader in the use of compressed natural gas (CNG) for personal automobiles.
The short-term national energy demand has expanded significantly since 2001 due to massive rise in sales of durable goods like refrigerators, washing machines, split air conditioners, and so on.
In 2004, Access Group International announced plans to invest $1 billion over the next 5 years in solar cell manufacture and wind farms. MOUs (memorandum of understanding) have been signed with Alternate Energy Development Board. In early 2005, the government approved a 25-year Energy Security Plan to boost electric capacity eightfold.
The Canadian conglomerate Cathy Oil and Gas signed a memorandum of understanding in late 2006 to invest $5 billion in oil and gas exploration, development, production and commercialisation in Pakistan.
The Federal Bureau of Statistics provisionally valued this sector at Rs.215,662 million in 2005, thus registering over 62% growth since 2000.
3. Services Sector
Pakistan's service sector accounts for about 52% of GDP. Transport, storage, communications, finance, and insurance account for 24% of this sector, and wholesale and retail trade about 30%. Pakistan is trying to promote the information industry and other modern service industries through incentives such as long-term tax holidays.
The government is acutely conscious of the immense job growth opportunities in service sector and has launched aggressive privatisation of telecommunications, utilities and banking despite union unrest.
Transport
Pakistan International Airlines, the flagship airline of Pakistan's civil aviation industry, had a turnover exceeding $1 billion in 2005. Private sector airlines in Pakistan includes Airblue, Aeroasia and Shaheen Air International. Many private airlines are in pipleline which includes Air Mahreq, Dewan Air and Pearl Air. Airblue is using the state of the art A-320 and A-321 aircraft for flying across Pakistan and will soon commence UK operation. Airblue has recently ordered 6 New A-321 aircraft, while 2 aircraft will be taken on lease which will be added to the existing fleet of 4-5 aircraft, making it the second biggest fleet behind PIA which has 42 aircraft.
The government announced a new shipping policy in 2006 permitting banks and financial institutions to mortgage ships. A massive rehabilitation plan worth $1 billion over 5 years for Pakistan Railways has been announced by the government in 2005.
Communication
Paging and mobile (cellular) telephone were adopted early and freely. Cellular phones and the Internet were adopted through a rather laissez-faire policy with a proliferation of private service providers that led to fast adoption. Both have taken off and in the last few years of the 1990s and first few years of the 2000s. With a rapid increase in the number of Internet users and ISPs, and a large English-speaking population, Pakistani society has seen major changes.
Pakistan Telecommunication Company Ltd has emerged as a successful Forbes 2000 conglomerate with over $1 billion in sales in 2005. Cellphone market has exploded twelvefold since 2000 to reach a subscriber base of over 50 million in 2007. In addition, there are over 6 million landlines in the country. As a result, Pakistan won the prestigious Government Leadership award of GSM Association in 2006. Wireless local loop and the landline telephony sector has also been liberalized and private sector has entered thus increasing the teledensity rate from less than 3% to more than 10% in span of two years.
Pakistan has more than 20 million Internet users as of 2005. The country is said to have a potential to absorb up to 50 million mobile phone Internet users in the next 5 years thus a potential of nearly 1 million connections per month.
The Government of Pakistan has, over the last few years, granted numerous incentives to technology companies wishing to do business in Pakistan. A combination of decade-plus tax holidays, zero duties on computer imports, government incentives for venture capital and a variety of programs for subsidizing technical education, are intended to give impetus to the nascent Information Technology industry. This in recent years has resulted in impressive growth in that sector. Pakistan saw an increase in IT export cash inflows of 50% from 2003-4 to 2004-5, with total export cash inflows standing at $48.5 million. In 2005-6 export cash inflows increased to greater than $73 million. This year the government has set a goal of $108 million. Exports account for 11% of the total revenues of the IT sector in Pakistan. Compared to India, Pakistan's IT sector is relatively small, but recent growth has been extremely high leading economists to be optimistic about the IT industries future prospects in Pakistan.
The Federal Bureau of Statistics provisionally valued this sector at Rs.982,353 million in 2005, thus registering over 91% growth since 2000.
Wholesale and Retail Trade
The Federal Bureau of Statistics provisionally valued this sector at Rs.1,358,309 million in 2005, thus registering over 96% growth since 2000.
Finance and Insurance
A reduction in the fiscal deficit has resulted in less government borrowing in the domestic money market, lower interest rates and an expansion in private sector lending to businesses and consumers. Foreign exchange reserves continued to reach new levels in 2003, supported by robust export growth and steady worker remittances.
Since 2000, Pakistani banks have begun aggressive marketing of consumer finance to the emerging middle class, allowing for a consumption boom (more than a 7-month waiting list for certain car models) as well as a construction bonanza. Credit card market continued its strong growth with sales crossing the 1 million mark in mid-2005.
The Federal Bureau of Statistics provisionally valued this sector at Rs.311,741 million in 2005, thus registering over 166% growth since 2000.
Property Sector
The property sector has expanded twenty-threefold since 2001, particularly in metropolises like Lahore. Nevertheless, the Karachi Chamber of Commerce and Industry estimated in late 2006 that the overall production of housing units in Pakistan has to be increased to 0.5 million units annually to address 6.1 million backlog of housing in Pakistan for meeting the housing shortfall in next 20 years. The report noted that the present housing stock is also rapidly ageing and an estimate suggests that more than 50 percent stock is over 50 years old. It is also estimated that 50 percent of the urban population now lives in slums and squatter settlements. The report said that meeting the backlog in housing, besides replacement of out-lived housing unit is beyond the financial resources of the government. This necessitates putting in place of framework to facilitate financing in the formal private sector and mobilise non-government resources for a market-based housing finance system.
The Federal Bureau of Statistics provisionally valued this sector at Rs.185,376 million in 2005, thus registering over 49% growth since 2000.
Public Administration and Defence
The Federal Bureau of Statistics provisionally valued this sector at Rs.389,545 million in 2005, thus registering over 65% growth since 2000.
Social, Community and Personal Services
The Federal Bureau of Statistics provisionally valued this sector at Rs.631,229 million in 2005, thus registering over 78% growth since 2000.
Economic Aid
Pakistan receives economic aid from several sources as loans and grants. The International Monetary Fund (IMF), World Bank (WB), Asian Development Bank (ADB), and others provide long term loans to Pakistan. Pakistan also receives bilateral aid from developed and oil-rich countries.
The Asian Development Bank will provide close to $6 billion development assistance to Pakistan during 2006-9. The World Bank unveiled a lending program of up to $6.5 billion for Pakistan under a new four-year, 2006-2009, aid strategy showing a significant increase in funding aimed largely at beefing up the country's infrastructure. Japan will provide $500 million annual economic aid to Pakistan.
Remittance
The remittance of Pakistanis living abroad has played important role in Pakistan's economy and foreign exchange reserves. The Pakistanis settled in Western Europe and North America are important sources of remittance to Pakistan. Since 1973 the Pakistani workers in the oil rich Arab states have been sources of billions dollars of remittance. Pakistan received nearly $4 billion dollars in remittance in 2005.
An IMF research paper has revealed that workers' remittances contribute 4% to the GDP of Pakistan and are equivalent to about 22 percent of annual exports of goods and services.
Remittances from overseas Pakistanis between July 2006 to April 2007 increased to $4,450.12 million, compared with $3,629.68 million the same period last year.
Investment
The Foreign direct investment (FDI) in Pakistan soared by 180.6 per cent year-on-year to US$2.22 billion and portfolio investment by 276 per cent to $407.4 million during the first nine months of fiscal year 2006, the State Bank of Pakistan (SBP) reported on April 24. During July-March 2005-06, FDI year-on-year increased to $2.224 billion from only $792.6 million and portfolio investment to $407.4 million, whereas it was $108.1 million in the corresponding period last year, according to the latest statistics released by the State Bank. Pakistan is on course to achieve FDI of $7 billion in the financial year 06/07, surpassing the government target of $4 billion.
Pakistan is now the most investment-friendly nation in South Asia. Business regulations have been profoundly overhauled along liberal lines, especially since 1999. Most barriers to the flow of capital and international direct investment have been removed. Foreign investors do not face any restrictions on the inflow of capital, and investment of up to 100% of equity participation is allowed in most sectors (local partners must be brought in within 5 years and contribute up to 40% of the equity in the services and agriculture sectors). Unlimited remittance of profits, dividends, service fees or capital is now the rule. Business regulations are now among the most liberal in the region. This was confirmed by a World Bank report published in late 2006 ranking Pakistan (at 74th) well ahead of neighbours like China (at 93rd) and India (at 134th) based on ease of doing business.
Tariffs have been reduced to an average rate of 16%, with a maximum of 25% (except for the car industry). The privatisation process, which started in the early 1990s, has gained momentum, with most of the banking system privately owned, and the oil sector targeted to be the next big privatisation operation.
The recent improvements in the economy and the business environment have been recognised by international rating agencies such as Moody's and Standard and Poor's.
Foreign Trade
Pakistan is a member of the World Trade Organization, and has bilateral and multilateral trade agreements with many nations and international organisations.
Fluctuating world demand for its exports, domestic political uncertainty, and the impact of occasional droughts on its agricultural production have all contributed to variability in Pakistan's trade deficit. In the six months to December 2003, Pakistan recorded a current account surplus of $1.761 billion, roughly 5% of GDP. Pakistan's exports continue to be dominated by cotton textiles and apparel, despite government diversification efforts. Exports grew by 19.1% in FY 2002-03. Major imports include petroleum and petroleum products, edible oil, chemicals, fertilizer, capital goods, industrial raw materials, and consumer products.
Past external imbalances left Pakistan with a large foreign debt burden. Principal and interest payments in FY 1998-99 totalled $2.6 billion, more than double the amount paid in FY 1989-90. Annual debt service peaked at over 34% of export earnings before declining.
With a current account surplus in recent years, Pakistan's hard currency reserves have grown rapidly. Improved fiscal management, greater transparency and other governance reforms have led to upgrades in Pakistan's credit rating. Together with lower global interest rates, these factors have enabled Pakistan to prepay, refinance and reschedule its debts to its advantage. Despite the country's current account surplus and increased exports in recent years, Pakistan still has a large merchandise-trade deficit. This amounted to around $12.112 billion in 2005/6, almost 10 percent of Gross Domestic Product (GDP).
One of the main reasons that contributed to the increase in trade deficit is the increased imports of earthquake relief related items, especially tents, tarpaulin and plastic sheets to provide temporary shelter to the survivors of earthquake of October 8, 2005 in Azad Jammu and Kashmir and parts of the NWFP, an official said. The rise in the trade gap was also fuelled by high oil import prices, food items, machinery and automobiles.
In the late 1990s, Pakistan received about $2.5 billion per year in loan/grant assistance from international financial institutions (e.g., the IMF, the World Bank and the Asian Development Bank) and bilateral donors. Increasingly, the composition of assistance to Pakistan shifted away from grants toward loans repayable in foreign exchange. All new US economic assistance to Pakistan was suspended after October 1990, and additional sanctions were imposed after Pakistan's May 1998 nuclear weapons tests. The sanctions were lifted by President George W. Bush after Pakistani president Musharraf allied Pakistan with the U.S in its war on terror. Having improved its finances, the government refused further IMF assistance, and consequently the IMF program was ended. The government is also reducing tariff barriers with bilateral and multilateral agreements.
The Petroleum Ministry says that this year the bill of oil imports was expected to reach $6.5 billion against $4.6 billion in the last fiscal year, which is the main reason behind the all-time high trade deficit.
The EU is the single largest trading partner of Pakistan absorbing over one-third of the exports in 2003.
Exports
Pakistan's exports stood at $6.927 billion in the first five months of the 2007 financial year, July to November 2006, up by 5.09 percent from last financial year's exports of $6.591 billion in the same period.
The exports in the 2006 financial year (July 2005 to June 2006) were $16.47 billion showing an increase of 14.40% compared to $14.39 billion last fiscal year.
Pakistan exports rice, furniture, cotton fibre, cement, tiles, marble, textiles, clothing, leather goods, sports goods, surgical instruments, electrical appliances, software, carpets, and rugs, ice cream, livestock meat, chicken, powdered milk, wheat, seafood (especially shrimp/prawns), vegetables, processed food items, Pakistani assembled Suzukis (to Afghanistan and other countries), defence equipment (submarines, tanks, radars), salt, marble, onyx, engineering goods, and many other items.
Imports
Pakistan's imports stood at $12.333 billion first five months of the 2007 financial year, July to November 2006, up by 10.35 percent from last financial year's imports of $11.176 billion in the same period.
The imports in the 2006 financial year (July 2005 to June 2006) amounted to $28.58 billion showing an increase of 38.80% compared to $20.60 billion during the previous fiscal year.
Pakistan's single largest import category is petroleum and petroleum products. Other imports include: industrial machinery, construction machinery, trucks, automobiles, computers, computer parts, medicines, pharmaceutical products, food items, civilian aircraft, defence equipment, iron, steel, toys, electronics and other consumer items.
Sales tax is levied at 15 percent both on imports and domestically produced products. The income withholding tax is levied at 6 percent on imports and at 3.5 percent on the sales of domestic taxpayers.
Deficit in Economy
In the first five months of the 2007 financial year, July to November 2006, Pakistan suffered trade deficit of $5.405 billion showing a 17.91 percent increase compared to the trade deficit of $4.584 billion in same period of year 2005-06.
Pakistan's trade deficit was $12.112 billion in last fiscal year 2005-2006, almost 10 percent of Gross Domestic Product (GDP), due to its high import bill and the rise in prices.
Economists believe that the soaring trade deficit would depreciate the Pakistani rupee against dollar and other currencies. The demand by local importers for dollars in the coming months would increase to finance their surplus imports. The rise in the trade gap has been attributed to high oil import bill, and rise in the prices of food items, machinery and automobiles.
