ISLAMABAD: Pakistan booked a trade deficit of $23.7 billion during the first 10 months of the current fiscal year as a sharp drop in imports was offset by an unsustainable drop in exports.
Pakistan Bureau of Statistics (PBS) reported on Tuesday that the shortfall between imports and exports decreased by 39.6 percent year-on-year. This decrease is due to various economic challenges that Pakistan is currently facing.
This marks a significant improvement over the same period last fiscal year, which saw a deficit of $39.3 billion.
The data collection agency showed that exports fell by 26.7 percent in April, indicating a worrying trend for the country’s economy, as exports play an important role in supporting its finances.
Exports have declined sharply over the past seven months, which can be attributed to various economic challenges including inflation, currency devaluation and political instability.
The government has imposed restrictions on imports to curb the widening trade deficit due to the country’s dollar shortage.
The monthly trade deficit in April narrowed 78 percent to $829 million from $3.76 billion a year ago.
Exports fell 11.7 percent to $23.17 billion in the 10-month period (July-April) from $26.25 billion in the same month a year ago and imports fell 28.4 percent to $46.89 billion in July-April 2021. 65.5 billion dollars were recorded in -22.
Similarly, imports also declined by 28.4 per cent to $46.89 billion from $65.5 billion in July-April 2021-22. Comparing monthly trade with the previous month (March), exports of goods fell by 10.46 percent in April while imports fell by 22.6 percent.
During the last 10 months, average monthly exports were $2.317 billion, compared to last year’s average of $2.625 billion, and average monthly imports were $4.688 billion against $6.55 billion in FY22.
The economy is unlikely to touch $28 billion by the end of this financial year due to poor export performance in July-April. Exports last year were $31.8 billion.
Pakistan is currently facing a balance of payments crisis due to a large trade deficit. This problem has led to a decrease in the country’s foreign exchange reserves as well as a depreciation of the Pakistani rupee. Its imports are outpacing its exports, which has become a major contributing factor to the crisis.
In FY22, the trade deficit was at a historic high of $48.38 billion, with imports at $80.18 billion (an average of $6.68 billion per month) and exports at $31.8 billion ($2.65 million per month). Exports in FY2021 were $25.3 billion while imports were $56.4 billion. Exports increased by 25.6%.
