Pakistan’s economy has been hit hard as the country’s exports fell by 12% during the first ten months of the current fiscal year, according to data released by the Pakistan Bureau of Statistics.
The drop in exports has been attributed to the restrictions imposed by the government on foreign trade, which included a ban on imports last year to support the balance of payment due to foreign exchange crisis.
The ban was lifted in August 2022 under pressure from the International Monetary Fund, but the State Bank of Pakistan restrained banks from opening letters of credit for processing import payments, citing insufficient dollars for import payment.
The decline in exports brought the country’s trade deficit down by around 40% during the same period, with imports also declining by 28%. The trade deficit for the July-April period of 2022-23 was recorded at $23.71 billion compared to a deficit of $39.27 billion in the corresponding period of the previous fiscal year.
The import bill for April 2023 fell by 56% to $2.95 billion compared to $6.66 billion in April 2022, while exports in the same month fell by 27% to $2.12 billion compared to $2.89 billion in the same month last year. This led to a contraction in the trade deficit by 78% to $829 in April 2023 compared to a deficit of $3.76 billion in the same month of the previous year.
The government’s decision to impose restrictions on foreign trade may have helped stabilize the balance of payments, but it has also negatively impacted the country’s exports. This has led to a decline in the country’s overall economic growth, which could have significant long-term consequences for Pakistan’s economy.