Jul-Sept trade deficit shrinks 21%

ISLAMABAD: Pakistan’s trade deficit shrank over one-fifth to $9.2 billion in the first quarter of current fiscal year solely on the back of a steep fall in imports as exporters failed to take advantage of 100% currency devaluation over the past five years, reported the Pakistan Bureau of Statistics (PBS) on Tuesday.
The gap between imports and exports came in at $9.2 billion in the July-September quarter, which was 21.4%, or $2.5 billion, less than the comparative period of previous fiscal year.
Trade figures were released by the national data collecting agency two days before a scheduled meeting between Finance Minister Ishaq Dar and exporters on the discontinuation of electricity subsidies due to the lack of funds.
According to the PBS, exports stood at a mere $7.1 billion, up $129 million, or 1.8%, during the July-September period.
The unimpressive export proceeds should be a matter of concern as they indicate that the country will not only miss the annual export target of nearly $38 billion, but the receipts may also be lower than the previous fiscal year.
Over the past six months, the local currency has devalued by 33%, while the total devaluation in the past five years has almost been 100%. Yet, the monthly export bill is hovering around $2.5 billion, barring last fiscal year when it briefly touched $3 billion due to high global commodity prices.
This raises questions over the country’s export policies that are backed by energy subsidies, which stood at around Rs110 billion in the last fiscal year.
Imports amounted to $16.3 billion during the July-September period, down $2.4 billion, or 12.7%, the report stated.
In this connection, the federal government and the State Bank of Pakistan (SBP) have taken administrative measures to contain imports. A ban had also been placed, but it proved to be largely ineffective.-Agencies