Pakistan’s Import Bill Surges by 43% in May 2023, Trade Deficit Widens

Pakistan’s Import Bill Surges by 43% in May 2023, Trade Deficit Widens

Karachi, June 2, 2023 – Pakistan’s import bill experienced a substantial increase of 43% in May 2023, reaching $4.28 billion compared to $2.99 billion in the previous month, according to official statistics released on Friday. In contrast, exports recorded a nominal increase, reaching $2.19 billion in May 2023 compared to $2.14 billion in April 2023.

The significant rise in imports resulted in a trade deficit of 143%, amounting to $2.09 billion in May 2023, compared to $860 million in the previous month. Experts attribute this surge in the import bill to the relaxation of the opening of Letter of Credit (LCs) for import payments during May 2023. While the government initially restricted LCs to essential goods, commercial banks prioritized opening LCs as per the instructions of the State Bank of Pakistan (SBP).

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During the first eleven months of the fiscal year 2022-2023 (July to May), Pakistan’s total import bill witnessed a 29% decline, reaching $39.72 billion compared to $51.16 billion in the corresponding period of the previous fiscal year. Meanwhile, the country’s exports declined by 12% to $25.37 billion during the same period, down from $28.87 billion in the corresponding period of the previous fiscal year.

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Consequently, the trade deficit narrowed by 41% to $25.79 billion during the eleven-month period under review, compared to a deficit of $43.41 billion in the corresponding period of the previous fiscal year.

The widening trade deficit reflects the challenges faced by Pakistan’s economy, as higher imports outpace export growth. It highlights the need for focused efforts to promote export-oriented industries, enhance competitiveness, and diversify the country’s export base to reduce reliance on imports.

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The government and relevant authorities should continue to closely monitor the trade balance and take necessary measures to address the trade deficit, encourage exports, and rationalize imports to ensure a more sustainable and balanced trade environment.

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Disclaimer: The figures provided in this news report are based on official statistics and are subject to change as new data becomes available.