The government’s battle against bloated deficit is reversing because it widened 81.4 percent within the first month of the present financial year (FY22), driven largely by an almost double increase in imports compared to exports from the country.
The merchandise deficit reached $3.058 billion in July this year against $1.686bn over the corresponding month last year, consistent with data shared by the Ministry of Commerce on Monday.
Trade deficit reached an all-time high of $37.7bn in FY18. However, the government’s measures led to a drop by deficit to $31.8bn in FY19 and $23.183bn in FY20. The trend reversed and the deficit was recorded at $30.796bn in FY21.
The trade gap has been widening since December 2020, mainly led by exponential growth in imports and relatively slow growth in exports.
The import bill in July this year went up 46.6pc to $5.405bn against $3.687bn over the corresponding month last year. within the outgoing financial year (FY21), the import bill surged by 25.8pc to $56.091bn from $44.574bn the previous year. On a month-on-month basis, the import bill increased by 10.69pc.
The import bill is additionally rising mainly thanks to increased imports of petroleum, soybean, machinery, staple and chemicals, mobile phones, fertilizers, tyres and antibiotics, and vaccines. the expansion in remittances at the instant is going to be sufficient to finance the import bill.
Exports posted a growth year-on-year by 17.3pc to $2.347bn in July 2021 against $2.001bn over the corresponding month last year. On a month-on-month basis, exports of merchandise dipped by 13.64pc. Export proceeds went up 18.2pc to $25.294bn in FY21 from $21.394bn over the last year.
Adviser to the Prime Minister on Commerce Razak Dawood has said the govt sets an export target of $38.7bn for the present financial year.
Addressing a news conference alongside PM’s special assistant Shahbaz Gill here on Monday, he said exports had touched the highest-ever mark of over $25bn in FY21.
Mr. Dawood said the export target of commodities for FY21 was $25.3bn which of services was $6bn. He said the highest-ever export of IT services was recorded within the outgoing financial year, which grew by 47pc to $2bn.
For the present financial year, he said the commerce ministry projected $31.2bn worth of products and $7.5bn of services exports.
Mr Dawood said the govt was specialized in the export-oriented policy, besides pursuing a policy of “Make in Pakistan” to encourage the local industry and make locally produced goods internationally compatible for exports.