ISLAMABAD - Pakistan’s trade deficit widened to $9.01 billion during first quarter (July-September) of the ongoing fiscal year mainly due to massive growth in imports.

The country’s trade imbalance was recorded at $9.01 billion during July-September of the year 2017-18 as against $7 billion during same period of the previous year, showing an increase of 29.75 percent, according to Pakistan Bureau of Statistics (PBS). A widening of trade deficit is increasing the current account deficit, which stood at $2.6 billion during two months of the current year. Pakistan’s foreign exchange reserves are continuously declining due to widening of current account deficit and repayment on foreign loans. The reserves are sharply tumbled by over $4 billion in one year to $19.8 billion.

The PBS data showed that the exports were registered at $5.17 billion during July-September of 2017-18 as compared to $4.67 billion of the corresponding period of the last year showing a growth of 10.84 percent. Meanwhile, the imports had also shown an increase of 22.19 percent and recorded at $14.26 billion during first quarter of the current financial year as against $11.67 billion of the same period last year.

Pakistan’s imports are continuously increasing which is widening trade deficit of the country. The Economic Coordination Committee (ECC) of the Cabinet last week had decided to imposed and enhanced Regulatory Duty (RD) on around 297 items in a bid to discourage the surge in import bill. The government is targeting to reduce the overall imports bill by $3 billion to $5 billion during the current fiscal year. Similarly, the ECC had also approved measures to boost the exports. The ECC approved a proposal that 50 percent of the export package incentive for eligible textile and non-textile sectors, announced in Prime Minister’s Export Package, be provided on the same terms as for the period January to June 2017 without condition of increment. Remaining 50 percent of the rate of incentive would be provided if the exporter achieves an increase of 10 percent or more in exports as compared to the corresponding period of the last year. It was also approved that an additional 2 percent drawback would be provided for export to non-traditional markets. Besides, expeditious settlement of payments claims by the State Bank of Pakistan (SBP) was also approved.

According to the latest data of PBS, Pakistan’s exports have enhanced by 8.91 percent to $1.68 billion in September 2017 from $1.54 billion of September 2016. Meanwhile, the imports recorded a growth of 16.73 percent and reached $4.48 billion in September 2017 from $3.83 billion in the same period of the last year. Therefore, the trade deficit was recorded at $2.80 billion in September 2017 as against $2.29 billion of September 2016, showing an increase of 21.97 percent.