ISLAMABAD: Political instability and economic slowdown pulled Pakistan’s exports down 15.4 percent to 2.2 billion in January 2023 against $2.61 billion in the same month last year, making it the fourth consecutive decline.
Total exports in October 2022 were down 3.25 percent year-on-year, in November 17.6 percent, in December 16.3 percent, and now in January, 15.4 percent over the corresponding month of last year.
However, the country’s trade deficit shrank 32 percent to $19.63 billion in the first seven months of the current fiscal, as imports of non-essentials and other goods were curtailed. But still, it weighed on the struggling economy.
Last year in the same period, the import-export gap was at $28.86 billion, the Pakistan Bureau of Statistics (PBS) data showed.
Exports in the July-January period shrank 7.2 percent to $16.47 billion from $17.74 billion in the corresponding month a year ago. Similarly, imports were also down 22.5 percent to $36.1 billion from $46.6 billion recorded in July-January 2021-22.
In January 2023, exports were down 15.4 percent to $2.2 billion from $2.61 billion in the same month a year ago, while imports dropped 19.6 percent to $4.856 billion from $6.036 billion in January 2022. The trade deficit during the month narrowed down 22.7 percent to $2.65 billion from $3.42 billion in the same month last year.
Comparing monthly trade with the previous month (December), goods exports in January 2023 fell 4.4 percent from $2.31 billion in the previous month. Similarly, imports also declined 5.8 percent from December’s imports of $5.15 billion.
A cursory glance at the trade data shows that over the last seven months, the average monthly exports were at $2.35 billion, whereas last year’s average was at $2.53 billion. The average monthly imports were at $5.157 billion against $6.66 billion in FY22.
In FY22, the trade deficit was $48.38 billion, a historic high, with imports of $80.18 billion (average $6.68 billion/month) and exports at $31.8 billion ($2.65 million/month). In FY2021, the exports were $25.3 billion, while imports were at $56.4 billion. Exports increased 25.6 percent and imports 42.2 percent. The trade deficit in FY22 was 31 percent higher than the previous year.
The economy is experiencing a balance-of-payments crisis, as Islamabad has been spending more on imports than exports, running down its stock of foreign currency and weighing on the rupee’s value. The rupee recently dropped to new lows against the US dollar after authorities uncapped its value in the interbank market to meet one of the lending conditions put down by the IMF.
The government is also grappling with rampant inflation. In January 2023, it reached a 48-year high of 27.6 percent. On January 23, the central bank raised the policy rate by 100 basis points to 17 per cent — the highest since 1998 — to help stabilise the economy. But, it has made bank financing much costlier, resulting in the contraction of industrial growth, business activities and exports.