Pakistan's trade deficit soar to record high of $43.66 billion in last 11 months

The higher prices of energy, industrial raw materials and food in the international market widened the trade balance 

According to the official data released by Pakistan Bureau of Statistics (PBS), Pakistan’s trade deficit has widened to a record $43.33 billion in July-May period of the 2021-22 financial year. The trade deficit soared mainly due to sky-high oil and food import bill.  The widening trade deficit has worsened the country’s current account balance and further weakens the rupee.

The first 11 months of fiscal 2021/22 witnessed deficit of $15.88 billion or 57.85% higher than the $27.45 billion the economy racked up in the same period a year ago.

Imports surged to a whopping $72.18 billion while exports were at $28.848 billion in the 11 months (July-May) of current financial year.  We imported 60% more goods than we exported.  In the same period last fiscal, imports were at $50 billion and exports at $22.576 billion. This depicts a 27.8% growth in exports and a 44.3% increase in imports.

Despite a healthy increase in the exports, the trade deficit continues to rise during this period.  The higher crude, petroleum products, edible oil, food and other commodities prices in the international market largely contributed in the increase of import bill.

Goods exports in May 2022 picked up 55.66% to $2.6 billion from $1.67 billion in the corresponding month a year ago, while imports rose by 25.4% to $6.64 billion from $5.297 billion in May 2021. The trade deficit in May 2022 swelled 11.5% to $4.04 billion from $3.63 billion in the same month a year ago.

Comparing trade performance with the previous month, goods exports in May 2022 were down 10.2% from $2.897 billion in April 2022. Imports during May 2022 were down by half a percent from $6.679 billion in April 2022.Amid the country’s external financing imbalance, the rupee devaluation did not significantly help boost exports.

During the last fiscal (2020-21) trade deficit stood at $31.1 billion or 34.3% higher than the $23.159 billion recorded in FY2019-20. In FY2021, imports clocked in at $56.405 billion and exports $25.30 billion. During FY2020, the exports hit $21.39 billion, while imports came in at $44.55 billion, a deficit of $23.159 billion.

The PBS also reported the services trade statistics for the first ten-month period (July-April 2021/22). During the period, the local companies hired more services from other countries than they provided to them.

The services trade deficit increased 71% to $3.58 billion in the period under review from $2.1 billion in the same period of FY2021. The economy hired foreign companies’ services for $9.37 billion while selling its services abroad for $5.79 billion.

                                                                    Business Desk