KARACHI: Pakistan’s trade deficit shrank 4.5 percent to $9.936 billion in the first five months of the current fiscal year of 2015/16, showed the Pakistan Bureau of Statistics (PBS) data on Thursday as fall in imports remained in favour of the balance of trade.
The trade deficit was recorded at $10.402 billion in the July-November period of the last fiscal year.
The PBS data showed that exports dropped 13.81 percent to $8.541 billion in July-November 2015 as compared to $9.909 billion in the same period a year ago.
Imports also dipped nine percent to $18.477 billion in the period under review as against $20.311 billion in the corresponding period a year ago.
The PBS further said exports decreased 3.88 percent to $1.662 billion in November over the previous month, but slid 15.12 percent over the same month a year ago.
Imports inched down 0.23 percent to $3.917 billion over October, but they declined 8.87 percent over the same month a year earlier.
The PBS data said the trade deficit in November 2015 increased by 38 percent year-on-year to $2.2billion. This was driven by 9 percent year-on-year increase in imports to $3.9bn and 15 percent year-on-year decline in exports to $1.6bn.
Analyst said trade deficit narrowed due to a plunge in global oil prices, bolstering the outlook for the country’s current account balance as well as the rupee.
But in a worrying sign, weak global demand also led to a fall in the country’s merchandise exports.
Oil accounts for nearly a third of Pakistan’s imports. Global crude prices have plunged more than five percent since the oil producing cartel kept the output unchanged at a meeting last week, promising windfall gains for many Asian economies.
The oil rout has led to a sharp fall in pump prices for petrol and diesel, helping cool inflation and boost personal disposable income.
Analysts said a lower external deficit would also buoy the rupee, amid signs of increasing volatility in the local market. The smaller trade deficit provides the central bank with further scope to loosen policy again over the coming months, they added.
