Trade deficit narrows 11pc to $21.5bln in July-February

KARACHI: Pakistan’s trade deficit narrowed 11 percent to $21.5 billion in the first eight months of the current fiscal year of 2018/19 as exports marginally rose, whereas imports continued to scale down during the period, official data revealed on Tuesday.

Pakistan Bureau of Statistics (PBS) data showed that exports rose 1.8 percent to $15.1 billion, while imports fell 6.1 percent to $36.6 billion in the July-February period of FY2019.

Trade deficit amounted to $24.1 billion with exports standing at $14.8 billion and imports measured at $39 billion in the corresponding period a year earlier.

PBS data further showed that trade deficit shrank 20.1 percent year-on-year to $2.2 billion in February. It narrowed 6.9 percent month-on-month during the month.

The government is eyeing $27 billion in exports revenue in the current fiscal year, betting on its measures to boost exports and investment.

It is working to improve ease of doing business, lower taxes for small and medium-sized businesses and cut taxes on imports of industrial raw materials.

Together with the measures, rupee deprecation is also giving higher yields to exporters. Rupee lost more than a quarter of its value against the US dollar over the past one year.

In February, exports remained flat at $1.8 billion over the corresponding month a

year ago. Imports, however, declined 12.2 percent year-on-year to $4.1 billion during the month.

In February, exports fell 7.5 percent from $2 billion in January, while imports decreased 7.1 percent from $4.5 billion in the preceding month.

The government also came hard on merchandise imports to ease pressure on external account. It extended the list of products that bear regulatory duties. Last government placed duties on imports to slash growing import bills.

Imports under China-Pakistan Economic Corridor (CPEC) framework continued to jack up import bill that was the main cause of $12 billion current account deficit in the last fiscal year of 2017/18.

The present government got an opportunity to cut off import bills as early harvest projects under CPEC have reached maturity stage with imports of energy equipment – the main component of the program – continuing to come down.

PBS data further showed that trade deficit in services also decreased 34.7 percent to $2 billion in the July-January period of FY2019. Exports of services remained flat at $3 billion in the first seven months, while imports of services decreased 18.1 percent to $5.1 billion.

Trade deficit stood at $3.2 billion with exports standing at $3.1 billion and imports measured at $6.3 billion in the corresponding period a year earlier.

In January, trade deficit in services sharply narrowed 57.5 percent year-on-year to $196.4 million.

Services exports, during the month, were up 6.9 percent to $471.5 million in January over the corresponding month a year earlier. Imports, however, decreased 26.1 percent year-on-year to $668 million during the month under review.

In January, trade deficit in services narrowed 46.5 percent from $367 million in December. Exports slightly grew 0.3 percent from $470 million, while imports fell 20.2 percent from $837 million in the preceding month.