Trade deficit widens by 45 per cent

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Trade deficit gap between imports and exports from July through September this year was $2b higher than IMF projections

Pakistan’s trade deficit has widened by 45 per cent to $6.5 billion in the first quarter of this fiscal year on back of significant contraction in exports and double digit growth in imports, bringing foreign currency reserves under pressure.

The trade deficit gap between imports and exports, from July through September this year was $2 billion higher than the projections made by International Monetary Fund (IMF). The IMF had projected $4.48 billion trade deficit for July to September period.

Pakistan’s exports contracted by 10.1 per cent in the first three months and stood at only $6 billion to $680 million lower than the exports made in the comparative period of the last fiscal year, according to figures released by Pakistan Bureau of Statistics on Tuesday.

The reduction witnessed despite much-trumpeted Vision 2025 of the Planning Commission that promises to take the exports to $150 billion in next ten years. To achieve this overambitious goal, the country has to increase the exports to $38 billion this year from the last year’s level of $25 billion.

Contrary to contraction in exports, Pakistan’s import bill increased to $12.5 billion in the first three months, showing an increase of $1.34 billion or 12 per cent growth over last year’s first quarter imports. The IMF had projected that Pakistan’s imports would grow to $10.7 billion in first quarter –an assessment that went off the mark by $1.84 billion.

The result of contraction in exports and double-digit growth in imports was the trade deficit of $6.5 billion –showing an increase of 45.1 per cent or $2.1 billion trade deficit in first quarter of the fiscal year.

 

1 COMMENT

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