Pakistan’s trade deficit decreased by 32.65% to $17.13 billion in the first half of the current fiscal year due to a more than 5% decrease in non-essential and other products imported compared to the same period last year. At the same time in FY22, this import-export shortfall was estimated at $25.44 billion.
From July through December, imports decreased 22.63% to $31.38 billion from $40.56 billion during the same period in 2017. The Pakistan Bureau of Statistics (PBS) monthly trade bulletin said on Tuesday that exports also decreased, falling 5.79% to $14.25 billion from $15.125 billion at the same time last year.
In December 2022, exports were down 16.64% to $2.3 billion from $2.76 billion in the same month a year ago, while imports dropped 31.9% to $5.16 billion from $7.58 billion in December 2021. The trade deficit during the month narrowed down 40.7% to $2.86 billion from $4.82 billion in the same month last year.
When comparing monthly trade performance with the prior month (November), December 2022’s exports of products decreased by 3.64% from $2.39 billion in November. Similar to exports, imports are also down 0.4% from $5.18 billion in November.
The economy may be significantly behind in catching up to last year’s total exports of $31.79 billion by the end of FY23, as the six-month average exports were $2.37 billion compared to the previous fiscal’s monthly average of $2.65 billion.
But from July to December of FY23, average monthly imports were $5.23 billion, down from the average of $6.68 billion in FY22.
It should be mentioned that in the most recent fiscal year (FY22), the economy recorded a historic high trade deficit of $48.38 billion, an increase of more than 31% from the year before.
In an effort to stabilize the economy as the current account deficit grew out of hand, foreign exchange reserves decreased, and the rupee fell to historic lows against the US dollar, the government prohibited the import of all luxury goods in May of last year.
Although the import restrictions on luxury goods were relaxed in August, these products were nevertheless subject to high taxes to stop the flow of funds outside.
The nation’s foreign reserves have dwindled to only $5.82 billion, which is hardly enough to pay for a month’s worth of imports.
