ISLAMABAD     -    Pakistan’s trade deficit narrowed by around 35 percent in the first quarter (July to September) of the current fiscal year mainly due to reduction in imports of the country.

The country’s trade deficit was recorded at $5.73 billion in July to September period of the year 2019-2020 as compared to $8.79 billion in the corresponding period of last year, showing reduction of 34.85 percent.

The latest data of Pakistan Bureau of Statistics (PBS) showed that trade deficit has shrunk due to the massive reduction in imports of the country.

Pakistan’s imports were recorded at $11.25 billion in first quarter of the current fiscal year as against $14.17 billion in the same period of previous year, showing reduction of 20.59 percent.

However, the country’s exports have recorded minor growth of 2.75 percent in the period under review.

Pakistan has exported goods worth of $5.52 billion in July-September period of the year 2019-2020.

Imports have started declining due to the imposition of regulatory duties on luxury items and automobiles.

Moreover, the government also slapped banned furnace oil imports last year, in addition to a number of policy interventions including improved energy supply, import substitution drive, economic stabilization, and currency devaluation.

However, the country’s textile exports have remained at the same level of previous year showing no major growth. The incumbent government had provided several incentives to the five exports oriented sectors including textile to enhance the country’s exports.

The government had depreciated the currency and reduced the prices of electricity and gas but it failed to achieve the desired results.

According to the fresh PBS data, Pakistan’s exports have recorded a growth by 2.67 percent and gone to $1.77 billion in the month of September 2019 from $1.72 billion of September 2018.

However, the imports have recorded decline of 13.9 percent and reached $3.79 billion in September 2019 from $4.4 billion in the same period of the last year.

The trade deficit was recorded at $2.11 billion in September 2019 as against $2.67 billion of September 2018, showing a reduction of 24.58 percent in last one year.

According to the Annual Plan 2019-2020, there is improvement in exports receipts in certain major groups like; textile and petroleum while decline in food, other manufacturing groups and all other items exports offset the positive gains and overall exports declined.

Slowdown in economic activities at our certain export destinations has also affected demand side of exports.

On the other hand, the import bill of machinery, textile, transport, food and metal groups declined while agriculture and other chemical and petroleum groups witnessed rise.

The import bill of these two groups ballooned because of rise in import of fertilizer and chemicals for agriculture and petroleum crude and LNG under petroleum group.

However, the import bill of other major groups witnessed decline, which led towards overall contraction in the import bill.