ISLAMABAD: Pakistan’s trade deficit has expanded significantly, rising by 21.6 percent during the first ten months (July–April) of fiscal year 2020–2021, according to official data released by the Pakistan Bureau of Statistics (PBS) on Wednesday. The increase in the trade deficit is attributed largely to a sharp surge in the country’s import bill, which has outpaced the growth in exports.
The trade deficit soared to $23.82 billion during the July–April period of the current fiscal year, compared to $19.59 billion during the same timeframe in the previous year. This substantial increase reflects the pressure on Pakistan’s external account due to rising global commodity prices and increased domestic demand for imported goods.
Pakistan’s import bill registered an increase of 17.67 percent, climbing to $44.7 billion during the ten-month period. In comparison, imports stood at $37.99 billion in the corresponding period of the previous fiscal year. This jump in imports has significantly contributed to the widening trade deficit, indicating a greater outflow of foreign exchange and placing stress on the balance of payments.
On a somewhat positive note, exports also recorded a notable improvement. Exports rose by 13.5 percent, reaching $20.88 billion, up from $18.39 billion during the same ten-month period last year. However, the growth in exports was not sufficient to offset the impact of the rising import bill, resulting in a continued expansion of the overall trade deficit.
Furthermore, on a Year-on-Year (YoY) basis, the trade deficit for April 2021 alone widened sharply by 33.24 percent. It reached $2.99 billion, compared to $2.24 billion recorded in April of the previous year.
The persistent growth in the trade deficit highlights the need for strategic measures to boost exports and manage imports. Without addressing this imbalance, the rising trade deficit may continue to pose significant challenges to Pakistan’s economic stability and foreign exchange reserves.