Trade deficit widens over 100pc to $11.66bln in Jun-Sept

ISLAMABAD: Pakistan’s trade performance remains in doldrums as imports continued to outpace exports by a wide margin, mounting pressure on balance of payment (BOP) position as well as rupee, official data showed on Monday.

According to the latest statistics, trade deficit for the first quarter (July-September) of fiscal year 2021-22 widened 100.62 percent to an alarming $11.66 billion from $5.81 billion in the same period of last fiscal year.

The surge comes amid a booming demand, which is drawing in imports, while this gap could widen further in months ahead as the economy gradually recovers from the coronavirus blows.

During these three months, exports stood at $6.967 billion against $5.47 billion last year, showing a growth of 27.3 percent. Whereas, imports increased 65 percent to $18.63 billion, as in the same period last year, the imports were recorded at $11.286 billion.

According to the Pakistan Bureau of Statistics (PBS) monthly trade bulletin, goods exports in September 2021 picked up 26.1 percent to $2.38 billion from $1.887 billion in the corresponding month a year ago, while imports rose by 50.7 percent to $6.48 billion from $4.3 billion in September 2021.

Goods exports in September 2021 rose 5.9 percent to $2.38 billion from $2.247 billion in August 2021. Imports during the month of September reached $6.48 billion as against $6.577 billion in August 2021, down 1.4 percent.

Trade deficit in September 2021 swelled 70 percent to $4.1 billion from $2.41 billion in same month a year ago.

This alarming number, economists believe could increase pressure on the country’s balance of payment and exchange rate in the months to come. It is to be noted that since mid-May 2021, the rupee has been shedding its worth without any respite. On Monday alone, it lost 44 paisas against the greenback and closed at Rs170.5.

Since May 12, 2021 the rupee has devalued by Rs19.5 to date. The country’s current account deficit has already turned red, as the trade deficit is continuously ballooning for the last few months.

During the last fiscal (2020-21) trade deficit stood at $31.1 billion, 34.3 percent more than $23.159 billion recorded in FY2019-20. In FY2021, imports clocked in at $56.405 billion and exports $25.30 billion. During FY2020, the exports hit $21.39 billion, while imports came in at $44.55 billion, a deficit of $23.159 billion.

Meanwhile, according to trade statistics for international services during July-August 2021/22, local companies imported more services than they exported. Trade deficit in services ballooned 41.24 percent to $618.76 billion in the first two months (July-August) of FY2022 from $438.1 billion in the same period of FY2021.

In FY2022’s first two months, the economy hired foreign companies’ services of $1.627 billion, while sold services abroad of $1.008 billion. In same period of FY2020, country’s services exports (money inflow) stood at $799.9 million and imports (outflow) were recorded at $1.238 billion. This represents an increase of 26 percent in exports and 31.42 percent decline in imports of services.

During August 2021, services exports stood at $531.3 million and imports at 885.98 million indicating a deficit of $354.7 million. In previous month of July 2021, exports were recorded at $477 million and imports at $741 million with a deficit of $264 million.

During the month under review, exports went up by 11.38 percent and imports by 19.55 percent when compared to the previous month. Comparing August 2021’s services trade performance with the same month of the last year, exports jumped 53.64 percent and imports also surged 88.89 percent.

During August 2020, exports stood at $345.8 million and imports at $469 million, with a deficit of $123.24 million. Comparing the deficit of both the months, it increased by 187.8 percent in August 2021.