Trade deficit doubles to $24.78 billion, but import growth shows signs of slowing
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Loading... - Kala Malik
- 04 Jan 2022
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Pakistan's trade deficit is currently up nearly 100% at $24.78 billion so far in fiscal year 2021-22, from $12.36 billion in the previous fiscal year's corresponding half, provisional data indicates.
According to the most recent official numbers on external trade, the trade imbalance in December 2021 alone increased by 57% to $4.1 billion from $2.6 billion in the same month last year. However, it also bears mentioning that the monthly deficit was down 18% compared to November's reading.
According to the Ministry of Commerce, early signs indicate that import growth has slowed. "Imports declined to $6.9 billion in December 2021 from $7.9 billion in November 2021, a decrease of $1 billion," the ministry said, adding that the target for December 2021 imports had been $6.2 billion.
Imports were up 37.9% year-on-year to $6.9 billion from $5.005 billion in December 2020. Meanwhile, Pakistan's exports rose 16.7% to $2.761 billion in December 2021, up from $2.366 billion in the same month last year, an almost $400 million gain, according to data.
The month's export target was $2.8 billion.
Exports have climbed by 25% to $15.125 billion in the first half of the current fiscal year, up from $12.11 billion in July-December 2020. The export target was $15 billion for the period.
The persistent expansion in the trade deficit has been caused by a substantial increase in import costs, which might push the current account deficit above $10 billion.
In FY18, the trade deficit had reached an all-time high of $37.7 billion. Government measures, however, resulted in a decrease to $31.8 billion in FY19 and $23.183 billion in FY20. The trend reversed in FY21, with the trade deficit again expanding to $30.796 billion.
The trade deficit has been expanding since December last year, owing primarily to an exponential increase in imports and relatively slow growth in exports. To rein in surging imports, the government has imposed taxes on luxury items, while the central bank has increased required cash margins on the import of different items to discourage their import.
Adviser to the Prime Minister on Commerce and Investment, Abdul Razak Dawood, chaired a consultative meeting to discuss trade patterns in December 2021, during which he was briefed of the latest indications. Read More…
