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Trade deficit narrows 12.8pc to $26.3bln in July-April

Business

May 16, 2019

KARACHI: Trade deficit narrowed 12.8 percent year-on-year to $26.3 billion in the first 10 months of the current fiscal year of 2018/19, PBS data showed on Wednesday, as the government’s measures to slash import bills are coming to fruition.

The Pakistan Bureau of Statistics (PBS) data showed that trade deficit stood at $30.1 billion in the corresponding period a year earlier. Exports remained flat at $19.1 billion in the July-April period compared to the corresponding period a year earlier.

Imports amounted to $45.4 billion in the period under review compared to $49.3 billion in the corresponding period a year earlier, depicting around eight percent decline year-on-year.

In April, trade deficit eased 9.9 percent year-on-year to $2.6 billion. Exports fetched two billion dollars in April 2019 compared to $2.1 billion in the same month a year earlier, showing a 1.5 percent decrease year-on-year. Imports stood at $4.7 billion in April, down 6.4 percent over the corresponding month a year earlier.

Trade deficit however sharply increased 22.2 percent month-on-month in April 2019 from $2.1 billion in March 2019. Exports rose 5.8 percent in April 2019 from $1.9 billion in the previous month. Imports increased 14.3 percent in April 2019 from $4.1 billion in March 2019.

Imports started to scale down as the government extended efforts taken by the previous government to impose regulatory duties on non-essential products and encourage import substitutions.

The over-indebted economy is facing anemic external account position with inflation climbing to over nine percent, the rupee losing a third of its value over the past year, and foreign exchange reserves barely enough to cover two months of exports. Foreign loans have now surpassed $90 billion, according to official statistics.

The country has recently signed a six billion dollars loan agreement with the International Monetary Fund (IMF) – 13th since 1980s – to cope up with current account deficit that could stoke balance of payments crisis.

It is also expecting another two to three billion dollars from the Asian Development Bank and the World Bank once the bailout is approved by the IMF’s board.

The IMF projected the economic growth falling to 2.9 percent during the current fiscal year from 5.2 percent in 2018, while the central bank revised down its estimate to between 3.5-4 percent.

PBS data further showed that trade deficit in services shrank 41.3 percent to $2.5 billion in the July-March period as imports of services fell 21.8 percent to $6.4 billion, while exports of services remained flat at $3.9 billion.

In March, trade deficit in services narrowed 42.3 percent year-on-year to $237.2 million as imports fell 17.4 percent and exports rose 5.6 percent.

Trade deficit in services widened 23.2 percent in March from $192.4 million in February as imports increased 16.5 percent and exports improved 13.3 percent month-on-month.

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