8.2 C
New York
Thursday, October 6, 2022
HomeWorldPakistanTrade deficit widens by 29% due to increased imports

Trade deficit widens by 29% due to increased imports

ISLAMABAD:

Improvement in external trade the balance has turned out be short lived as Pakistan trade the deficit increased by 29% to $3.5 billion. in August after import bill hit the mark of 6 billion dollars, despite the ban and the construction of non-tariff barriers.

The gap between imports and exports amounted to $3.53 billion. in August, up by 29%, or $791 million, on month-on-month, reports the Pakistan Bureau. of Statistics (PBS) on Friday.

Raising him is burdensome head in In August, the value of Pakistan’s imports topped $6 billion, ahead of the government’s expectations, which had been hoping build on last monthly impulse. According to PBS, there has been an increase of 21% or $1.04 billion in import in August compared to the previous month.

federal government and State Bank of Pakistan (SBP) has taken administrative measures to curb imports; the ban was also were put in place, which proved to be largely ineffective. Central bank was also checking almost every letter of credit, introduced import quotas, and even restricted imports through open accounts.

While government lifted the ban on import, other restrictions remain in place thereafter faced pressure from the IMF and global trading partners.

IMF report published on Friday showed IMF backed Pakistan’s request for provisional approval of exchange measures under Article VIII of IMF articles of Agreement until June next year. The IMF report states that given the early actions of Pakistan of partial lifting of the import ban on luxury and uselessness items in August 2022, and his renewed commitment phase out restrictions related to currency and imports when the balance of Terms of payments (BOP) stabilized, this supported the restrictions. Deadline of June 2023 is allotted for the removal of these restrictions.

With floods wreaking havoc on standing crops nationwide, import bill likely to come under pressure one day again as the country prepares to import additional food supplies.

Month-on-month exports jumped 11% to $2.5 billion. in August 2022 over previous month – growth of 250 million dollars. steep decline in export can also become cause for anxiety for Ministry of Trade.

For current fiscal year 2022-23 government It has set in trade deficit target of $27.8 billion requiring reduction of 42% against last year deficit. Purpose of import set for in new fiscal year is $65.6 billion, which will require a reduction of 22% in import invoice.

in last fiscal yearPakistan trade the deficit has witnessed extravagant growth with unsustainable pace of over 55%, skyrocketing to record $48.3 billion due to unmanaged growth in import that surpassed all official estimates. This happened despite the temporary ban on certain goods.

higher trade deficit in previous year took heavy losses on foreign exchange reserves of the country, which fell by 62% compared to their peak value of $20 billion in August last year up to 7.6 billion dollars of last a week.

On the year-on-year basis, exports showed growth of 11.5% in August and amounted to 2.5 billion dollars. against $2.24 billion in the same month of previous year, according to PBS. In absolute terms there was a surge of $257 million in export.

Imports fell $543 million, or 8%, according to PBS. in august compared to the same month year back. Consequently, trade deficit narrowed down by 18.5% year-on-year up to $3.53 billion in august, contraction of $800 million, according to national data collection agency.

Generally, trade deficit during first in two months amounted to $6.3 billion – down by 17% or $1.3 billion compared to with same period of in last fiscal year, according to PBS. Exports remained at $4.8 billion.up by only $172 million or 3.8% for the period from July to August.

Imports amounted to 11 billion dollars – down by $1.1 billion or 9.2% – during first two months.

Published in Express Tribune, 3 September.rd2022.

Like Business on facebook, follow @TribuneBiz on Twitter to keep up to date join in talk.

Follow World Weekly News on

Derrick Santistevan
Derrick Santistevan
Derrick is the Researcher at World Weekly News. He tries to find the latest things going around in our world and share it with our readers.

Leave a Reply

Must Read