ISLAMABAD: In the first half of the current fiscal year, Pakistan’s trade deficit decreases by 32.65 percent to $17.13 billion as imports of non-essential goods and other goods slow by more than a fifth from last year. In the same time frame in FY22, this gap between imports and exports was recorded at $25.44 billion.
From $40.56 billion during the same time last year, imports decreased by 22.63% to $31.38 billion between July and December. The Pakistan Bureau of Statistics (PBS) monthly trade bulletin reported on Tuesday that exports were also lower by 5.79 percent, falling to $14.25 billion from $15.125 billion during the same time last year.
In December 2022, trades were down 16.64% to $2.3 billion from $2.76 billion around the same time a year prior, while imports dropped 31.9% to $5.16 billion from $7.58 billion in December 2021. The month’s trade deficit decreased by 40.7% to $2.86 billion from $4.82 billion during the same period last year.
Goods exports decreased by 3.64 percent from $2.39 billion in November 2022 when compared to the previous month’s trade performance. In a similar vein, imports are down 0.4 percent from $5.18 billion in November.
The economy may not even reach last year’s total exports of $31.79 billion at the end of FY23, as the six-month average exports were $2.37 billion compared to the monthly average of $2.65 billion.
However, FY23 imports averaged $5.23 billion per month from July to December, whereas FY22 imports averaged $6.68 billion per month.
It should be noted that the economy had a trade deficit of $48.38 billion in the most recent fiscal year (FY22), a record high and an increase of more than 31% from the previous year.
In an effort to stabilize the economy, the government imposed a ban on the import of all luxury goods that aren’t absolutely necessary in May. This was done because the current account deficit had grown out of control, foreign exchange reserves had decreased, and the rupee had fallen to all-time lows against the US dollar.
Even though the country allowed luxury goods to be imported in August, they were heavily taxed to hide the money leaving the country.
As low as $5.82 billion, the nation’s foreign reserves are barely sufficient to cover a month’s worth of imports.
Originally published in The News