Pakistan’s Trade Deficit Doubled in First Four Months of FY 2022: Pakistan Bureau of Statistics

In the first four months (July-Oct) of FY22, Pakistan’s import expenditure more than doubled primarily due to investment-related imports. Exports also grew but were unable to contain the trade deficit. Consequently, the trade deficit also more than doubled during the same period of FY22.

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The trade deficit more than doubled in the July-October period of FY2022, posting a rise of 104 percent to $15.525 billion against $7.617 billion for the same period in the last fiscal year. Similarly, in October 2021, the trade deficit swelled to $3.775 billion, a 109.4 percent increase compared to the same month in FY2021 where the deficit stood at $1.803 billion.

According to Commerce Ministry, in these four months (July-Oct) of the current financial year, imports grew by 64.5 percent to $24.994 billion as opposed to $15.193 billion for the same period last year. A similar trend was observed in Oct-21 as imports posted 60 percent growth ($ 6.246 billion) compared to the Oct-20 import figure of $ 3.907 billion.

One positive aspect of the growing trend in imports is that 40 percent of the growth is due to an increase in investment-related imports. Such imports reflect growing business activity in the country.

In the remaining 60 percent, petroleum, coal, and gas contributed 34% in import growth, while vaccines, food, consumer goods, and other imports contributed 11%, 8%, 2%, and 5% in import growth, respectively.

The net difference in imports was $9.801 billion between July-Oct FY22 and July-Oct FY21. A major chunk of $1.068 billion went in vaccine imports; $239 million in consumer goods, $823 million in food; $1.620 billion in capital goods; while $ 2.209 billion in raw material imports. Further, import receipts for petroleum, coal, and gas stood at $3.364 billion and miscellaneous imports stood at $478 million.

Another positive development that the Commerce Ministry reported is a record increase in exports. Though export growth was unable to contain the trade deficit, exports grew by 17.5% to $2.471 billion in October FY22, a record compared to previous years’ figures.

In the July-Oct period, exports grew to $9.468 billion compared to $7.576 billion in the same period of last financial year, posting a growth of 25%. According to analysts, if this trend continues, the government will cross the projected $28 billion export target for FY2022.



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