ISLAMABAD – Pakistan’s trade deficit has swelled to $20.54 billion in first nine months (July 2020 to March 2021) of the current fiscal year.
The country’s trade imbalance was recorded at $20.54 billion during July to March period of FY2020-21 as against $17.37 billion in the corresponding period of the last year. Pakistan’s exports have increased by seven percent to $18.669 billion in the 9-month period of the current financial year (FY) as compared to $17.451 billion in the corresponding period of the last year. During the same period, the imports grew by 12% to $39.210 billion as compared to $34.817 billion in the last FY. This growth has come from increase in import of raw material as well as import of wheat, sugar and cotton.
Adviser to the Prime Minister on Commerce and Investment Abdul Razak Dawood has shared the trade figures on the Twitter.
“Ministry of Commerce is glad to share that according to provisional figures, in March 2021 our exports increased to USD 2.345 billion,” he said and added this is an increase of 13.4% over Feb-2021. “It is the monthly highest in last ten years,” he added.
He said that it was also the first time since 2011 that exports have crossed the $ 2 billion mark for six consecutive months. The export growth of 29.3% over March 2020 should not be considered as it is misleading since there was a lockdown last year. On the other hand, the imports in March 2021 grew to $5,313 million which is mainly due to increased imports of petroleum, wheat, soy bean, machinery, raw material & chemicals, mobiles, fertilizers, tyres and antibiotics & vaccines in March 2021.
The ministry of finance in its monthly report had already noted that exports are expected to increase following export-oriented government policies, while imports are also expected to increase further on the back of recovery of the domestic economy, recent increases in international commodity prices and imports of food items to stabilize domestic food markets. Thus, trade balance is expected to slightly deteriorate but expected strong inflows of remittances will able to cover the trade deficit.
Despite massive increase in trade deficit, Pakistan’s current account posted a surplus of $ 0.9 billion (0.5 percent of GDP) for July-February FY2020-21. As per PBS, exports during Jul-Feb increased by 4.4 percent to $ 16.3 billion ($15.6 billion last year). The textile sector exports increased by 6.7 percent over the last year. Value added exports increased by 11.4 percent. The decrease in quantities of value-added exports was compensated by higher unit price. The total imports in July-February increased to $33.9 billion ($31.5 billion last year), thus grew by 7.7 percent.
The import of petroleum group decreased by 21.7 percent while import of petroleum crude decreased by 24.3 percent in value and increased by 13.8 percent in quantity. Import of petroleum product increased by 27.7 percent (quantity) and decreased by 20.7 percent (value). The food group import jumped by 50.3 percent during Jul-Feb FY2021 and it reached $ 5.3 billion ($3.6 billion last year) due to import of wheat and sugar allowed by the government to bridge the shortages in local markets.