ISLAMABAD: Pakistan’s trade deficit for the first seven months (July-January) FY 2017-18 has widened by 24.18 per cent, according to data released by Pakistan Bureau of Statistics (PBS).
Trade deficit was recorded at $21.546 billion for July-Jan 2017-18 against $17.351 billion in July-January 2016-17. Imports for July-January FY 2017-18 shot up by 18.92 per cent, touching $34.512 billion considering the government’s effort to rein in imports.
But, exports during the July-January 2017-18 period rose by 11.11 per cent to touch $12.966 billion against $11.67 billion in the same the period last year (SPLY).
Month-on-month exports during January declined 0.30 per cent to reach $1.971 billion against $1.977 billion in December 2017. But imports during January increased by 14.20 per cent to touch $5.607 billion despite the government’s decision to impose SRO on items in October to rein in imports, seemed to have failed altogether.
An analyst at Topline Securities while talking to Pakistan Today said that “The exports are increasing slowly as per market expectations, but the imports are still out of control despite all measures by the government.”
According to a judgment of the Sindh High Court (SHC), the measures taken by the Ministry of Commerce to overcome the rising imports of the country through an SRO have been rejected as the judges quashed the SRO 1035(1)2017. Now, the imports of all products, on which the Ministry of Commerce imposed a regulatory duty, would be allowed if the SHC order is not challenged in the Supreme Court of Pakistan within 30 days.
“The impact of the devaluation of Pakistani Rupee may come in the next two to three months,” the analyst said. The exports are growing as per the expectations, but the problem is with the growing imports which are creating problems for the current account. Total foreign reserves of the country have come down to below $19.182 billion this week because of the rising import bill.
“SBP had devalued the local currency by 5 per cent in December 2017 which may also help to enhance exports and reduce imports,” the analyst claimed. However, the central bank also raised the discount rate by 25 basis points to 6 per cent for the next two months.
Analysts at different brokerage houses believed that export of goods may rise to above $22-23 billion if the federal government releases industrialists’ refunds and export’s rebates on time.
The country’s goods exports have declined by 1.63 per cent to $20.448 billion in (July-June) 2016-17 from $20.787 billion in the same period last year. Country’s exports stood at $23.667 billion in 2014-15.
