KARACHI: Pakistan began new fiscal year 2016-17 (FY17) in a promising way as country’s trade deficiency narrowed by 27 percent in the first month (July) of new fiscal, said Pakistan Bureau of Statistics (PBS)’ data on Wednesday.
The exports decreased by 10.42% from $1.66 billion in June 2016 to $1.48 billion in the month of July 2016. However, significant decrease in imports by 20.37 percent to $3.56 billion during the first month of new fiscal helped the Pakistan’s trade balance to be narrowed. The imports of the country stood at to $4.47 billion by the end of June 2016.
Thus, on month to month premise Pakistan’s deficit contracted by 26.21 percent to $2.07 billion in July 2016 when contrasted with $2.81 billion exchange parity in the month of June 2016.
However, on yearly basis, gap in exports and imports remained large as trade deficit of Pakistan widened by 18.07 percent comparing to the trade balance of $1.77 billion in July 2015.
On yearly basis, exports of the country dropped by 6.86 percent in July 2016 to $1.48 billion as against the exports of $1.59 billion in the corresponding month of previous fiscal.
Meanwhile, imports of the country went up in the month of July 20-16 when compared to July 2015. The imports increased by 6.24 percent to $3.56 billion in July as compared to $3.35 billion in July 2015.
Pakistan trade deficit expected to remain on lower side during the ongoing fiscal as the government is taking steps to improve the trade situation of the country. In the recently announced budget, the Finance Ministry announced the introduction of a zero-rated sales tax regime for top five textile sectors. This incentive would help bring down industrial costs for the value-added textile sector and help increase their exports.
According to the Ministry of Commerce’s trade policy that was announced in March this year, after a lag of nine months, a target of $35 billion exports by 2018 has been set.
It is important to mention here that despite continued low commodity prices in the global markets, Pakistan witnessed 35 years-high trade deficit during FY16.
Pakistan’s trade deficit continued to widen previous year, as the decline in exports and a rise in non-oil imports have offset savings from the lower oil import bill.
