- The government’s import curb policy helps reduce the trade deficit.
- From July 2022 to May 2023, exports declined by 12.14 percent.
- The trade deficit narrowed by 49.5% to $2.1 billion in May 2023.
ISLAMABAD: Pakistan’s trade deficit narrowed by 40.6 percent to $25.8 billion in the July-May period of fiscal year 2022-23 from $43.41 billion in the same period last year, according to the Pakistan Bureau of Statistics (PBS). The data showed on Friday. .
The government’s policy of restricting imports to manage the balance of payments problem led to a reduction in the trade deficit. Total exports from July 2022 to May 2023 declined by 12.14 percent to $25.37 billion, while imports declined by 29.2 percent to $51.16 billion.
In May 2023, sales of Pakistani products abroad decreased by 16.7% to $2.186 billion and imports decreased by 36.76% to $4.275 billion.
The trade deficit narrowed by 49.5% to $2.1 billion in May 2023. Comparing monthly trade with the previous month (April), exports of goods increased by 2.3% and imports by 42.6% in May 2023. In April 2023, exports were $2.14 billion and imports were $2.997 billion.
According to official data, exports have continuously declined during the last eight months.
In October 2022, exports fell 3.25% year-on-year, November 17.6%, December 16.3%, January 15.4%, February 18.67%, March 14.76%, and April 26.7%.
Now, exports are down by 12.14 percent compared to the same months last year. The sharp decline in exports during these months is attributed to various economic challenges including hyperinflation, rupee depreciation, political instability and shortage of raw materials due to import restrictions.
Other factors that significantly affected domestic production were high costs of energy and bank financing within the country. Average monthly exports during July-May 2022-23 were $2.306 billion, against last year’s average of $2.625 billion, and average monthly imports were $4.65 billion against $6.57 billion in FY22.
With this performance, as the current fiscal year ends with a month to go, by the end of FY23 in June, total exports will stand at $27.7 billion and imports at around $55.8 billion.
Since 2003, Pakistan has been running a continuous trade deficit mainly due to high energy imports. China has emerged as Pakistan’s largest trading partner since 2012, replacing the US.
However, the largest trade deficit was recorded with Beijing, while a surplus was recorded with the US in recent years.
It may be noted that last year (July-June FY22), total exports were $31.8 billion. 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.
Originally published in The News.