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Tuesday, February 20, 2024

A critical review of Pakistan’s trade statistics for Q1 of FY22

Pakistan’s trade statistics for the first quarter of FY22 present a mixed picture of the country’s economic trajectory. The figures for imports and exports as reported by the Pakistan Bureau of Statistics are a potent indicator of the effectiveness of government’s trade policies and the direction of the economy.

Pakistan’s trade statistics for July 2021 – the first month of the new fiscal year – depict that Pakistan’s exports fell by 12.36% (in rupees) and 14.22% (in dollars), from $2.7 billion to $2.3 billion when compared to the previous month’s value of exports. Imports, on the other hand, also decreased from $6.35 billion to $5.6 billion; an 11.82% decrease in dollar terms. Hence, Pakistan’s trade statistics imply that the trade deficit fell from 3.6 billion dollars in June’21, to 3.26 billion dollars in July’21.

In contrast to July 2020, exports grew by a staggering 16.94% – in dollar terms – from $2 billion to $2.34 billion. The imports posted an increase from $3.67 billion to $5.6 billion – a 52.45% increase. The trade deficit, therefore, approximately doubled from $1.67 billion to $3.26 billion. This shows that trade deficit went up by a whopping 95% in July’21, in contrast to the same period of the previous year.

Exports of services increased 6.4% to $0.483 billion in July 2021 when considered against $0.454 billion of July 2020.

The values of imports and exports for August 2021 portray that trade deficit shot up by 150 % (in dollar terms) in comparison to August’20, and 34.31% when compared to July’21. Exports went down from $2.34 billion – in July’21 – to $2.248 billion in August. Imports recorded an increment of $1.01 billion –from $5.575 billion to $6.593 billion over a span of one month. This outlines that trade deficit rose from 3,235 billion to 4.345 billion over a month’s time period.

Furthermore, exports exhibited an upward trend – a 41.92% increase – when reviewed in comparison to August’20. However, the imports outvalued the exports by 56.9% and documented an increase of 98.82%. Therefore, trade deficit in August’21 was 150.87% greater than its value in August’20.

According to Prime Minister’s advisor for Commerce Abdul Razzak Dawood, exports of goods like home textile, men’s garments, cotton fabric, jerseys, T-shirts and food items like rice, fruits and vegetables increased in August 2021, when compared to the corresponding month of 2020.

Exports for the month of September were worth $2.38 billion and imports were valued to be $6.479 billion. The trade deficit for the month of September was $4.099 billion. When put up against the export and import figures of August’21 and Sepetember’20, this depicts that the trade deficit decreased by 5.33% when compared to the preceding month, and increased by 70.08% when compared to the same month of 2020.

Overall, in the first quarter of FY22, exports worth $6.967 billion were recorded and imports were $18.631 billion were documented. The trade deficit stood at $11.664 billion. In comparison to the Q1 of 2020, exports were up by 27.32% while imports were up by 65.08%. As it turns out, trade deficit is 100.62% more than its value in Q1 of 2020.

Read More: Pakistan’s services exports up by 26 pc in two months

Zulfikar Thaver, President of Union of Small and Medium Enterprises, informed that exports of certain textile items surge because of the Christmas season, in the July to November months. The local demand for cement has also escalated soared because of government’s measures aimed at supporting home financing.

According to Thaver, medicines are being imported in enormous quantities; therefore, it is important for the government to provide a firm support to the pharmaceutical sector to enable it to expand its production of all types medicines and medical equipment in Pakistan.

Read More: Pakistan set to increase exports to China in future