The country’s trade deficit ballooned by 55.29 percent in the financial year ended June 30, 2022 on the back of surging imports, especially of petroleum and groups
KARACHI: The country’s trade deficit ballooned by 55.29 percent in the financial year ended June 30, 2022 on the back of surging imports, especially of petroleum and groups.
During the financial year under review, the trade deficit jumped to $48.25 billion against $31.07 billion recorded in a year earlier, Pakistan Bureau of Statistics (PBS) reported Monday. The massive increase in the trade deficit came from the higher growth in imports of the country during the year under review, which grew much higher compared to growth in exports.
During the last financial year, exports grew by 25.51 percent to $31.76 billion compared to $25.30 billion in fiscal 2020-21 whereas imports posted almost 42 percent growth to $80.01 billion in the year under review against $56.38 billion dollar in the previous year.
In the month of June, the trade deficit grew by 33 percent to $4.8 billion against $3.62 billion against June 2021 and also increased by 16.50 percent against May 2022 when the trade deficit was $4.151 billion.
In June of outgoing fiscal, exports totaled $2.88 billion, showing growth of 5.83 percent against $2.72 billion against June of 2021 whereas compared to May 2022 when exports stood $2.62 billion, exports were up 10 percent.
The imports during the month of June 2022 rose by 21.57 percent to $7.7 billion against $6.3 billion in the same month of 2021 and were up by 14 percent against May 2022 when imports came to $6.77 billion.
“The huge trade deficit in the last fiscal was mainly caused by the high import bill of petroleum and foods groups,” Tahir Abbas, head of research at Arif Habib Limited, told The News. He said that prices of petroleum and food items went up massively in the international market, which pushed up the country’s import bill by manifold.
Tahir said that huge trade deficit has also negatively impacted current account deficit and he anticipated it to be settling down around $16.5 billion for the last fiscal. On the other hand, he pointed out that textile exports registered 26 percent growth to $19.4 billion in the last fiscal.
About the future trend of imports in the current fiscal and its impact on the trade deficit, Tahir anticipated that trade deficit would see contraction after government’s intervention to reduce imports as well as State Bank of Pakistan’s steps to check the imports.
He said that Covid vaccination import would be low and as well as high prices of petroleum product in the domestic market would curtail the consumption would be helping to bring down the imports.