Pakistan’s Import Restrictions Will Worsen The Economy: World Bank

Pakistan’s trade activities have slowed and import trends are pointing toward further decelerations to come, according to World Bank (WB) Senior Economist, Gonzalo Varela.

On Pakistan’s state of exports, he said services exports are recovering but exports of goods were declining.

Underlining Pakistan’s latest trade deficit numbers, the trade and macroeconomic researcher highlighted that the country’s exports declined by 6.4 percent more in July-February FY23 as compared to FY22.

“Contraction is marked in merchandise. In services, exports expanded,” he pointed out.

Further addressing the export drop of different subsectors with services in the country, the economist remarked that Pakistan’s exports fell with main destinations but increased to the EU.

As per the sector-wise breakdown of the export data, Varela noted that textiles and vegetable exports contracted. Meanwhile, exports of commodities such as live animals and foodstuffs improved.

The data on month-to-month growth shows the export deceleration in textile and vegetable exports.

Varela pointed out the improvement in some of the major services exports of Telecommunication, Computer and Information Services, and Travel in particular.

The other side of trade shows that imports have fallen by 22.6 percent in July-February FY23, with contractions observed both in merchandise and services.

“By origin, imports from China and USA declined, those from Qatar increased (driven by fuels),” he said.

“Most sectors experienced import contractions in Pakistan in the Jul-Feb FY23 period, w.r.t. Jul-Feb FY22,” Varela added.

The monthly breakdown of data for the most commonly imported materials shows a sharp and sustained decline in machinery imports.

The trend is systematic across different types of machinery, he noted.

Varela concluded in his final remarks for Pakistan that the decline in the trade engine of growth has slowed and further decelerations may come soon.

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