Pakistan’s trade deficit sharply narrowed 35.86% year-on-year to $3.924bn in the first two months of the current fiscal year of 2019/20 as imports considerably decreased on regulatory measures and slowdown in oil shipments, but exports slightly increased during the period, official data has showed.
In July-August, imports fell 21.41% year-on-year to $7.677bn, while exports rose 2.79% to $3.753bn, Pakistan Bureau of Statistics (PBS) data showed.
In August, trade deficit contracted 38.98% year-on-year to $1.799bn with both imports and exports down 26.26% and 7.65%, respectively.
Compared with July, trade deficit shrank 15.34% in August as imports fell 8.98% and exports decreased 1.85%.
PBS data showed that oil imports fell 26.75% to $1.935bn in the July-August period as imports of crude and petroleum products, in terms of volume, dropped 46.36% and 7.84%, respectively.
Except machinery, all other key import groups showed downward trend to give a respite to the current account deficit that noticeably contracted to 2.8% of GDP in July-August from 5.5% of GDP in the corresponding period a year earlier.
Machinery imports scaled up 8.23% from $1.591bn in the July-August period of the last fiscal year.
Food imports fell 26.81% year-on-year to $697.340mn in two months.
Imports under transport group declined 35.93% to $320.054mn.
Imports of fertiliser and agricultural chemicals decreased 23.31% to $1.231bn.
Metal imports fell 25.95% to $686.484mn in the period under review.
The government has taken a score of regulatory and administrative measures, including exchange rate adjustments and high import tariffs, to curtail imports.
Export sector, however, is still struggling to support the external account as outbound shipments staggered to climb despite rupee devaluation.
Analysts said settlement of refunds of exporters is likely to help exports rebound.
Value-added sector, however, showed a little sign of recovery in the July-August period.
Textile exports that contribute more than 60% to total exports marginally improved 2.3% to $2.303bn.
Knitwear exports, however, increased 12.84% to $541.484mn in two months.
Readymade garments’ exports increased 7.47% to $467.484mn.
Bedwear exports rose 1.22% to $399.994mn.
PBS data further revealed that food exports rose 14.27% year-on-year to $650.257mn in the July-August period due to significant 48.64% growth in rice exports.
Except wheat, sugar and oil seeds, all other exports under the food group increased during the July-August period.
Wheat exports tapered off 78.28% to $10.590mn as the government continued to slap ban on exports of wheat and wheat flour to control price hike in the country.
Sugar exports also fell 66.03% to $17.352mn during the period under review.
Leather sector’s exports increased 5.88% to $90.543mn in the July-August period.
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