ISLAMABAD: Pakistan’s trade deficit marginally widened to $5.8 billion in first quarter of current fiscal year due to surge in imports and contraction in exports as the government failed to make any significant improvement in exports despite 39 percent currency devaluation.
The trade deficit – which shows how much imports exceed exports – expanded in terms of all three indicators – year-on-year, month-on-month and cumulative, according to figures released by the Pakistan Bureau of Statistics (PBS).
The trade deficit, which stood at $5.7 billion in the comparative period of last fiscal year, widened to $5.8 billion in the July-September period of 2020-21, according to the national data collecting agency.
In absolute terms, there was an increase of $115 million or over 2% in the trade deficit in the current fiscal year. Overall, imports slightly increased to $11.3 billion in the July-September period. In absolute terms, imports grew $63 million.
Exports, which registered negative growth of nearly 1%, stood at less than $5.5 billion in first three months of the current fiscal year. In absolute terms, exports shrank $52 million, reported the national data collecting agency.
The Ministry of Finance, which until August was upbeat about the economic recovery, said last week that economic turnaround could be slower than expected.
Exports remain one of the areas where the Pakistan Tehreek-e-Insaf (PTI) government has been struggling to make improvement. A marginal improvement in exports in absolute terms often gives an impression of a major boost in terms of percentage due to a very low export base.
Pakistan’s exports have long remained around $2 billion a month and the trend did not change despite 39% currency devaluation. The devaluation caused more damage to the economy than any meaningful benefit.
