Business

Trade deficit shrinks 21.4pc in three months

By Israr Khan

October 05, 2022

ISLAMABAD: Country’s trade deficit in the first quarter (July-September) of FY2023 narrowed 21.4 percent to $9.2 billion against $11.72 billion in the same three months of the last fiscal, latest numbers showed on Friday, courtesy of tapering imports.

Imports in the first quarter shrank 12.7 percent to $16.3 billion from $18.72 billion in the same period last year; however, exports edged up 1.8 percent to $7.125 billion against $6.996 billion in the same period last year.

Pakistan imported nearly 20 percent fewer goods in September 2020 and sold a percent less products abroad compared to the corresponding month of the last fiscal, according to Pakistan Bureau of Statistics (PBS) data.

Moreover, exports in September 2022 were down 0.9 percent to $2.387 billion from $2.409 billion in the same month a year ago, while imports dropped 19.6 percent to $5.269 billion from $6.563 billion in September 2021.

In September 2022 trade deficit reduced 30.6 percent to $2.88 billion from $4.15 billion in the same month last year.

Comparing monthly trade performance with the previous month (August), goods exports in September 2022 fell 3.8 percent from $2.48 billion in the previous month, while imports slumped 13.2 percent compared to August imports of $6.07 billion.

It is worth-mentioning that in July 2022 the exports were down 3.6 percent, in August up 10.5 percent, and now in September they are again down 0.9 percent.

However, it is encouraging to note that the imports have been trending downwards since the start of this fiscal year as in July imports contracted 10.4 percent, in August 7.7 percent, while in September they decreased 19.7 percent over their respective corresponding months of last year, the statistical office’s trade bulletin revealed.

This downtrend reduced the trade deficit in the first quarter of FY2023 (from July through August 2022) 21.4 percent to $9.2 billion against the $11.72 billion last year.

Last fiscal, the economy racked up a historic high trade deficit of $48.38 billion, recording over a 31 percent increase over the previous year.

In FY2022, imports clocked in at $80.18 billion and exports $31.8 billion. In FY2021, the exports were $25.3 billion, while imports at $56.4 billion. Exports increased 25.6 percent and imports 42.2 percent.

The country’s services trade deficit was recorded at $361 million for August 2022. The services exports clocked in at $575 million and imports at $936 million recording a deficit of $361 million

In July 2022, Pakistan earned $555 million by selling its services abroad, while local firms hired services worth $803 million from overseas, recording a $248 million deficit.

Over July 2022, exports in August 2022 increased 3.6 percent and imports 16.6 percent. The deficit however widened 45.6 percent over the previous month.

Comparing August 2022’s services trade performance with the same month of the last year, exports increased by four percent and imports were down by 0.54 percent.

Last year, in August 2021, services exports stood at $553 million and imports at $941 million, with a deficit of $388 million. The services trade deficit was reduced by seven percent in August 2022 against the corresponding month of last year.

From July to August 2022, services exports increased 8.25 percent to $1.13 billion and imports up by 1.15 percent to $1.74 billion. During the month under review, the deficit stood at $608.7 million. Last year in the same period, exports were $1.04 billion and imports $1.72 billion, with a deficit of $675 million. The deficit dipped by 9.8 percent.

It is to be noted that in the FY2022, the services trade deficit was recorded at $5.175 billion, ballooning 105.7 percent from $2.516 billion in FY21.

In FY2022, services imports were $12.14 billion, while imports came at $6.97 billion. In FY2021, exports stood at $5.945 billion and imports at $8.46 billion. This represents an increase of 17.2 percent in services exports and 43.5 percent in imports.