Government’s policy measures have resulted in shrinking of trade deficit, a decline in imports and increase in exports which augurs well for the overall balance of payments of the country.
The trade deficit that stood at $17.7 billion in July – December 2017 has shrunk by 5% to $16.8 billion in the corresponding period in 2018.
The overall imports from July-December 2018 have shrunk by over 2% from $28.7 Billion in July – December 2017 to $28 Billion in July – December 2018. This trend is even more pronounced in respect of imports under RD regime, where the import value has declined from $5.2 Billion in July – December 2017 to $4.4 Billion in July – December 2018, showing a contraction of 16% (effective on 1994 tariff lines).
The trade balance in December 2018 compared to December 2017 shrunk by 19% from $2.9 Billion to $2.3 Billion.
In December 2018, the imports in the US$ term declined to $4.3 billion compared to $4.9 billion in December 2017 which reflects an import compression of over 12%.
This trend is more noticeable in December 2018 in respect of imports under RD regime (effective on 1994 tariff lines) wherein the imports declined from $896 million in December 2017 to $691 million in December 2018 (-23%).
The data indicates that the import compression measures that were taken in the supplementary Finance Act 2018 have firmly taken hold and are now effectively curtailing imports as per the policy of the government. The data on the import of containerized cargo also has shrunk by 9%.
There was a growth recorded in exports of 5.5% in December 2018 compared to December 2017. In the first six months from July-December 2018 exports have shown a growth of over 2% compared to the same period last year.