Trade deficit shrinks by a third as imports fall, exports rise

KARACHI: The trade deficit shrank by almost a third in the first eight months of the current fiscal year of 2024 as the country curbed imports and boosted exports amid a sign of economic recovery, official data showed on Friday.

The gap between exports and imports narrowed to $14.9 billion in the July-February period, down 30 percent from $21.3 billion a year earlier, according to data from the Pakistan Bureau of Statistics.

Exports rose 9 percent to $20.4 billion from $18.67 billion in the corresponding period of the previous year, while imports fell 11.9 percent to $35.2 billion from $39.97 billion in the corresponding period last year.

The improvement in the trade balance reflects the government’s efforts to reduce the current account deficit, which has been a source of vulnerability for the country, currently under an International Monetary Fund $3 billion bailout program since July 2023 to stabilize the economy and address external imbalances.

The trade deficit also contracted on a monthly basis, declining 13.5 percent to $1.7 billion in February from $2 billion in January.

According to the PBS, the trade deficit shrank marginally by 1.95 percent to $1.71 billion in February 2024 from $1.75 billion in the same period of the last year. On a year-on-year basis, the trade deficit has inched down by 1.95 percent compared to a deficit of $1.75 billion recorded in February 2023.

Exports increased 17.5 percent year-on-year to $2.6 billion from $2.19 billion in the same month of the previous year, while imports rose 8.9 percent to $4.3 billion from $3.94 billion in the same month last year. However, both exports and imports fell from the previous month, indicating some slowdown in trade activity.

Exports declined by 7.84 percent when compared monthly to $2.79 billion in the preceding month of January. Meanwhile, imports decreased by 10.19 percent to $4.29 billion from $4.77 billion last month.