ISLAMABAD - Pakistan’s trade deficit contracted by over 33 percent in four months (July to October) of the current fiscal year due to the continuous reduction in imports and increase in exports of the country.
The country’s trade deficit was recorded at $7.78 billion in July to October period of the year 2019-20 as compared to $11.7 billion in the same period of the previous year. Trade imbalance has shrunk by $3.92 billion in one year, according to the data shared by Adviser to Prime Minister on Commerce and Textile Abdul Razak Dawood. He said that trade statistics for July-October indicate that annual trade deficit may decrease by $12 billion to $19 billion (from $31 billion) in the current fiscal year.
“This coupled with workers’ remittances will positively address out current account deficit woes,” he said on his social media account. He said that for the first time in last 15 years, exports are rising and imports are decreasing simultaneously. The increase in export is even more significant in terms of quantities—showing increase production and economic activity in export oriented sectors.
The data showed that Pakistan’s exports have recorded minor growth of 3.6 percent in four months despite getting incentives from the government. The country’s exports registered at $7.53 billion in July-October period of the current financial year as compared to the $7.27 billion in the corresponding period of previous year. On the other hand, the government has successfully controlled the soaring imports of the country. Imports have declined by 19.3 percent in the period under review. Pakistan has imported goods worth of $15.31 billion in July-October of 2019-20 as compared to $18.97 billion in the same period of last year. The incumbent government has taken several measures to curtail rising import bill since coming into power in August 2018. In the budget 2019-20, the government waived off duty on import of 1,639 raw materials to facilitate industrial growth in the country.
According to the data, the country’s exports have registered growth of 6 percent in the month of October 2019. The country has exported goods worth of $2.01 billion in October 2019 as compared to $1.9 billion in the same period of the previous year. However, the imports have tumbled by around 17 percent. Imports were recorded at $3.98 billion in October 2019, which was around $4.8 billion in the same month of the previous year. The reduction in imports and increase in exports have resulted in reduction in trade deficit by 32 percent during the month of October this year. Pakistan’s trade deficit was recorded at $1.97 billion in the month of October 2019 as compared to $2.91 billion in the same month of previous year.
Razak said that reduction in trade deficit would contribute in reduction in Current Account Deficit and would save precious foreign exchange. He further said that due to the efforts of ministry of finance under the leadership of Prime Minister Imran Khan have started to pay off. It is projected that cumulative exports during the ongoing fiscal year are likely to reach $26.187 billion, up from $24.656 billion in FY19. The government has already reduced the cost of raw materials and semi-finished products used in exportable products by exempting them from all customs duties.
