ISLAMABAD - Pakistan’s trade deficit contracted by almost two percent during first four months (July to October) of current fiscal year.
The country’s trade deficit was recorded at $11.8 billion during July-October period of the ongoing financial year as against $12 billion of corresponding period of previous year, showing a minor decline of 1.97 percent. Trade deficit has been controlled due to the unexpected increase in exports as against the imports, according to the latest data of Pakistan Bureau of Statistics (PBS).
Pakistan’s exports went up by 3.52 percent to $7.3 billion during first four months of the current fiscal year. On the other side, the country’s imports grew by only 0.06 percent to $19.1 billion during July-October period of the year 2018-19.
The decline in trade deficit would help in controlling soaring current account deficit. The current account deficit is the real threat to foreign exchange reserves of the country. The reserves held by State Bank of Pakistan have recently declined to $7.7 billion, which could cover only one and a half months’ imports. However, the government had recently succeeded in getting $6 billion package from Saudi Arabia, which would reduce pressure on the reserves. Saudi Arabia would place $3 billion cash deposits in the account of State Bank of Pakistan. In addition, it would also provide a one-year deferred payment facility for the import of oil, worth up to $3 billion, according to the Foreign Office.
Officials in ministry of commerce welcomed the decline in trade deficit of the country. They hoped that trade deficit during ongoing fiscal year would not increase to the level of previous year. “The State Bank of Pakistan’s decision of depreciating currency and measures taken by federal government to facilitate exports are helping in reducing the trade deficit of the country,” said an official. He further said that the government had introduced measures in mini budget to control the imports of the country. The government had doubled the Federal Excise Duty (FED) on cars of 1800cc engine capacity or more from 10 percent to 20 percent. Similarly, the government had also decided to increase the duty on several imported luxury products. The duty had increased on expensive phones. The government had imposed 10 percent Regulatory Duty on imported mobile phones costing more than Rs15000. Similarly, the government had imposed 10 percent RD on imported footwear, furniture, paper, fruits, vegetables, fish and its products and cosmetic products.
ANNUAL DATA
Pakistan’s exports enhanced by 10.15 percent to $1.9 billion in October 2018 from $1.7 billion of October 2017. Meanwhile, the imports recorded an increase of 9.28 percent and reached $4.84 billion in October 2018 from $4.43 billion in the same period of the last year. Therefore, the trade deficit was recorded at $2.9 billion in October 2018 as against $2.7 billion of October 2017, showing an increase of 8.72 percent.
MONTHLY RESULTS
On a month-on-month basis, exports in October increased by 1.17 percent to $1.9 billion from $1.88 billion of September 2018. However, imports in October 2018 decreased by 1 percent to $4.84 billion from $4.89 billion of September. The month-on-month trade deficit this time was down by 2.36 percent and recorded at $2.94 billion during October 2018.