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.
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.