Pak­istan’s trade deficit shrinks to $11.8bn in 4 months

Gulf Times Business - - BUSINESS -

Pak­istan’s trade deficit dur­ing Ju­lyOc­to­ber shrank by 1.97% year-on year to $11.786bn from $12.02bn, ac­cord­ing to lat­est data re­leased by Pak­istan Bureau of Sta­tis­tics yes­ter­day.

Dur­ing the pe­riod be­tween July-Oc­to­ber, ex­ports jumped up by 3.52% at $7.28bn with im­ports mov­ing up by a mea­gre 0.06% reach­ing $19.071bn from $19.06bn same pe­riod last year.

Pak­istan`s econ­omy has been un­der im­mense pressure from the declining re­serves and dented ex­ports; the PTI govern­ment has in­tro­duced a range of re­forms to curb im­ports and push up ex­ports but ef­forts have not brought about the de­sired results.

Fi­nance Min­is­ter Asad Umar has stressed the need to en­hance ex­ports to over­come debt or more loans from In­ter­na­tional Mon­e­tary Fund.

How­ever, th­ese ef­forts have not trans­lated into ex­ports, which af­ter peak­ing in March at $2.31bn, have been on the declining trend dur­ing the last eight months, fall­ing to their low­est in Septem­ber at $1.78bn af­ter a slight growth in Au­gust.

The luke­warm growth in ex­ports was also vis­i­ble dur­ing Oc­to­ber on yearly ba­sis af­ter it clocked in at $1.9bn up only by a mea­gre 1.17% from the same pe­riod last year.

The tepid growth in ex­ports comes de­spite the Rs32bn cash sup­port dur­ing the last 18 months to the tex­tile and cloth­ing exporters un­der a Spe­cial Prime Min­is­ter Pack­age.

There are also re­ports that China has agreed to pro­vide deeper mar­ket ac­cess for Pak­istani goods worth $1bn in the cur­rent fiscal year but it was not clear when those mea­sures will be taken to boost ex­ports to China un­der the free trade agree­ment. It is, how­ever, per­ti­nent to men­tion the declining trend in im­ports.

Im­ports have flat­tened dur­ing the last four months in­clud­ing Oc­to­ber with a mea­gre in­cre­ment of 0.06%.

Year-on-year im­ports dur­ing the out­go­ing month saw a re­ver­sal of 1% fall­ing to $4.84bn from $4.9bn last year.

The de­cline in im­ports can be at­trib­uted to the dip in ma­chin­ery re­lated im­ports which fell to their low­est in two years at $505mn in Au­gust.

Th­ese im­ports em­anated from the on­go­ing in­fra­struc­ture and en­ergy re­lated pro­jects un­der the um­brella of China-Pak­istan Eco­nomic Cor­ri­dor.

Ex­ports and re­mit­tances are key con­trib­u­tors to the coun­try`s for­eign ex­change re­serves.

State Bank’s for­eign ex­change re­serves have al­ready fallen to their four and a half year lows to $7.67bn.

The declining re­serves enough to cover just one month im­ports are at the heart of eco­nomic chal­lenges trou­bling the in­cum­bent govern­ment.

Pak­istan’s ex­ter­nal sec­tor has staged a re­cov­ery dur­ing the on­go­ing fiscal year ev­i­dent in the 13% jump in in­ward re­mit­tances cou­pled with the flat­ten­ing trade deficit and im­ports.

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