Trade Deficit Expands Even Pakistan Exports Are Going Up
Trade Deficit Expands Even Pakistan Exports Are Going Up: Pakistan has booked the $27.3 billion trade deficit in 9 months, even exports lately raised due to administrative and policy actions of the government as per ministry of commerce statement.
The trade deficit, gap between exports and imports during July-March period, was equal to 106% of the government’s annual target of $25.7 billion, showed official statistics that Pakistan Bureau of Statistics (PBS) released this week. The higher trade deficit in just 9 months will have adverse implications for both the current account deficit and foreign currency reserves.
The trade deficit widened 17.3% year on year to $27.3 billion beating the amount projected for the entire fiscal year, suggesting continuous worries for economic managers. Pakistan is expected to book a “current account deficit” of around $16 billion during the current fiscal year 2017-18 against the government’s target of $9 billion. This will have direct implications for foreign currency reserves that have slipped to $11.7 billion by the end of March 2018.
For imports: Federal government has taken a number of measures including levying regulatory duties on hundreds of tariff lines and more importantly, devaluing the rupee by 10% against the US dollar to curb imports. The value of imports stood at $44.4 billion, which was 15.7% or $6 billion higher than the import bill booked during the months of July 2017 – March 2018 of the last fiscal year. The import bill was equal to 91% of the annual target.
Exports have peaked to $2.23 billion in March as export receipts were up by $2 billion during the first 9 months. Showing an increase by 13.14% from July 2017 – March 2018, equal to 74% of the annual export target of $23.1 billion these export receipts are still 260% less than the import bill.
Global trade faces several challenges that are likely to impact Pakistani consumers and producers. For instance, the trade war between the US and its major trading partners is likely to impact the global supply and demand of commodities that are frequently traded between the countries. Trade costs are likely to be bigger by higher costs and procedural obstacles faced by both exporters and importers.
Government needs to make a long term strategy to minimize the gap present between exports and imports that will definitely change the existing the trade deficit figures.