Trade deficit shrinks 5.9pc in first half

ISLAMABAD: Pakistan’s trade deficit for the first half of this fiscal (1HFY19) narrowed 5.7 percent or about $1 billion to settle down at $16.9 billion over $17.94 billion recorded in the same period of the last fiscal, Pakistan Bureau of Statistics (PBS) data showed on Thursday.

Topline Securities in a report said this improvement

in trade numbers was primarily due to lower oil-related imports.

“Furnace oil imports have reduced by 90 percent to only 300,000 tons during 1HFY19 compared to 3 million tons during the same period last year,” the brokerage said adding it was because of a shift in the government’s focus to alternate fuels for power generation (RLNG and coal).

Similarly, diesel imports were also down 36 percent to 1.4 million tons compared to 2.1 million tons last year, Topline added .

The PBS data presented that the country’s exports posted an increase of 1.7 percent to reach $11.18 billion during July-December 2018-19, while imports eased 3 percent to come down at $28.1 billion compared to the corresponding period of 2017-18.

Analyst said neither exports grew nor imports declined as desired through rupee has devalued massively since December 2017. In June 2018, a dollar was equal to Rs119 and now it’s at Rs140, indicating a 17.6 percent devaluation against greenback.

According to official figures, during last fiscal, cumulative exports were recorded at $11 billion while imports at $28.94 billion.

During December 2018, exports were registered at $2.066 billion, which were 4 percent more over $1.977 billion in same month of last year.

Imports, however reduced by 8.5 percent to $4.5 billion

in December 2018 from $4.91 billion in same month last

year.

During the month under review, the economy accumulated trade deficit of $2.427 billion however, it was 17.2 ($506 million) less than what was recorded at $2.933 billion last year.

Comparing the monthly figures with the previous month, exports increased by 12 percent (or $223 million) over November 2018’s figure of $1.843 billion.

Imports, however, reduced by 2.9 percent (or $134 million) over November 2018, when they clocked in at $4.626 billion.

Experts believe that major factors for slowdown in foreign economies and decline in commodities’ prices do not exonerate the local industry and the government itself from their responsibilities of taking up due steps for boosting exports, as Pakistan cannot wait for the US, EU, China, and the middle eastern economies to pick up and increase their demand for Pakistani products.