September 28, 2020

Reduced Imports Decrease Trade Deficit To $31.8 Billion

The trade deficit of Pakistan has come down by 15.35% from $37.6 billion to $31.8 billion. The deficit decreased mainly due to the reduced imports. The imports shrank by 9.9% to $54.8 billion, mainly due to the decreased machine imports.

The government had set the target to reduce the trade deficit by a further $5.8 to $26 billion but failed to do so as the exports could not be increased.

The Pakistan Bureau of Statistics (PBS) showed in their trade summary report that the exports could not even reach the same level as that of the same time period, last year and hence, the trade deficit target was missed. Following are a few stats released by PBS in their report:

The trade deficit of Pakistan has come down by 15.35% from $37.6 billion to $31.8 billion. The deficit decreased mainly due to the reduced imports. The imports shrank by 9.9% to $54.8 billion, mainly due to the decreased machine imports.

The government had set the target to reduce the trade deficit by a further $5.8 to $26 billion but failed to do so as the exports could not be increased.

The Pakistan Bureau of Statistics (PBS) showed in their trade summary report that the exports could not even reach the same level as that of the same time period, last year and hence, the trade deficit target was missed. Following are a few stats released by PBS in their report:

The exports reduced by 1% or $234 million to $22.97 billion. Pakistan’s currency had depreciated by almost 40% and that could have led to a greater amount of exports. But, the target of $27 billion worth of exports could still not be reached.

The government has given almost PKR 30 billion in power subsidies to export sector industries to increase their competitiveness, but this step did not prove to be much fruitful either.

Advisor to the PM on Commerce Abdul Razak Dawood set the target for the exports to be at $27 billion because he assessed that access to China and a massively depreciated currency would make them reach the planned exports target, but that did not turn out to be the case.

Governor State Bank Dr. Raza Baqir said that the export targets cannot be achieved by only controlling the exchange rates, improving the competitiveness of the businesses is the only way to improve exports in the long run.

For the new FY 2019-20, Pakistan has set the exports target at $26.8 billion, imports are projected to be at $51.8 billion and the trade deficit of $24.9 billion is expected.

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