ISLAMABAD: Pakistan’s trade deficit has swelled to $18 billion only in six months of current fiscal year due to faster growth in imports as against exports.

The country’s trade deficit had recorded $18 billion during six months (July to December) of the current fiscal year as compared to $14.4 billion of the same period of last year. The trade imbalance had recorded an increase of 24.5 percent due to continuous faster growth in imports as against exports of the country, Pakistan Bureau of Statistics (PBS) reported on Wednesday.

Pakistan’s exports had registered at $11 billion during July-December of the year 2017-18 as compared to $9.9 billion of the corresponding period of the last year showing a growth of 11.24 percent. Meanwhile, the imports had shown an increase by 19.11 percent and recorded at $29 billion during first six months of the current financial year as against $24.3 billion of the same period last year.

Managing external account is matter of concern for the government. Pakistan’s foreign exchange reserves are eroding due to repayment against previous loans and financing current account deficit (CAD).  The country’s foreign exchange reserves are around $20 billion, in which State Bank of Pakistan held reserves are $14 billion.

Pakistan’s foreign exchange reserves has dropped by over $4.5 billion in the past one year due to fast drying up of foreign currency inflows.

Pakistan’s current account deficit is sharply increasing due to massive growth in imports as against exports and remittances. Current account deficit almost doubled to $6.430 billion in the first five months of the current fiscal year of 2017/18 as a widening trade gap offset growth in external inflows on account of foreign direct investment and remittances.

The independent economists believed that Pakistan faces an external financing gap of around $12 billion in the current fiscal year. Pakistan’s gross external financing requirements are around $20 billion including a projected $14-billion current account deficit and $5.9-billion foreign debt repayment.

However, out of $20 billion, the government has around $9 billion, which leaves net financing gap of about $11-12 billion.

The government has taken several measures to contain the financing gap. The measures include imposition of regulatory duties on non-essential imports, provision of un-interrupted energy to the export-oriented industries, the export package worth Rs180 billion. “These measures, together with the recent market-driven adjustment in the exchange rate would help in narrowing the current account deficit, thereby reducing the gross financing need,” the State Bank of Pakistan said in a recent statement.

According to the latest data of Pakistan Bureau of Statistics, Pakistan’s exports have enhanced by 14.81 percent to $1.98 billion in December 2017 from $1.72 billion of December 2016.

Meanwhile, the imports recorded a growth of 10.09 percent and reached $4.9 billion in December 2017 from $4.5 billion in the same period of the last year. Therefore, the trade deficit was recorded at $2.9 billion in December 2017 as against $2.7 billion of December 2016, showing an increase of 7.12 percent.