The already soaring trade deficit has further widened to 81.4 percent in the first month of the current fiscal year (FY22).
This widening gap is primarily driven by the substantial increase in imports without a corresponding rise in the exports from the country.
According to provisional foreign trade figures during the first month of current fiscal year (2021-22), imports stood at $5.405 billion as compared to $3.687 billion in July 2020, showing a massive increase of 46.6 percent or $1.718 billion.
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On a Month-on-Month basis, the import bill increased by 10.69 percent.
The merchandise trade deficit increased by almost twice this July when it was recorded at $3.058 billion as compared to $1.686 billion in July 2020, data from the Ministry of Commerce showed on Monday.
The higher imports bill is also due to the global hike in petroleum prices. While the exports have failed to catch up with the increased imports, the growth in remittances is likely to be sufficient to finance the higher import bill for now.
Prior to this, the trade deficit in FY18 had reached an all-time high of $37.7 billion. However, it was brought down to $31.8 billion in FY19, and even further down in FY20 when the trade deficit had dropped to $23.183 billion.
This year, the trend has reversed towards worsening, with the trade deficit having been recorded at $30.796 billion in FY21. The deterioration in the trade balance has been happening since December 2021.
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The exports had grown by 17.3 percent Year-on-Year to $2.347 billion in July 2021, up from $2.001 billion in July 2020. On a monthly comparison, however, they had fallen by 13.64 percent from June 2021. This is despite the exports touching the highest-ever mark of over $25 billion in FY21.
