Pakistan’s trade deficit surged to $7.337 billion during July-August period of the current fiscal year (2MFY22), rising 133 per cent as imports outpaced exports drastically, according to the provisional data released on Wednesday.
The data compiled by local media outlets showed that the reverse trend was noted in trade deficit for the second consecutive month as merchandise trade deficit reached $4.05 billion in August against $1.740bn over the corresponding month last year (2MFY21).
Trade deficit had reached an all-time high of $37.7bn in FY18. However, the government measures led to a drop to $31.8bn in FY19 and $23.183bn in FY20. The trend reversed and trade deficit was recorded at $30.796bn in FY21.
The trade gap has been widening since December last year, mainly led by exponential growth in imports and comparatively slow growth in exports.
The import bill in August rose by 89.9pc to $6.313bn against $3.324bn over the corresponding month of last year. On the month-on-month basis, the import bill increased by 12.7pc.
In the outgoing fiscal year (FY21), the import bill surged by 25.8pc to $56.091bn from $44.574bn the previous year.
The initial estimates show that the rising import bill might push the current account to $10bn in the FY22.
The State Bank of Pakistan (SBP) had projected CAD to hover around 2-3 percent of GDP, equivalent to $6 billion to $9 billion for the current fiscal year. However, independent economists like Dr Hafiz Pasha see the CAD going up to $12-13 billion for the current fiscal year.
The exports of the country fetched $2.257 billion during August 2021, while imports stood at $6.333 billion in the same month so the trade deficit went up by $4.055 billion just in the first one month.
Total exports in the first two months (July and August) clocked in at $4.597 billion, while imports at $11.934 billion, leading the total trade deficit to surge to $7.337 billion just in first two months of the current fiscal year.
Abdul Razak Dawood, Advisor to Prime Minister on Commerce, on Wednesday said exports for August 2021 grew by 43 percent to $2.257 billion as compared to $1.584 billion in August 2020.
“The exports for August 2021 are short by $143 million of our monthly target of $2.4 billion,” the adviser said and urged the exporters to double their efforts to market their exports in order to achieve our target.
In the wake of rising imports, the State Bank of Pakistan (SBP) has been using exchange rate anchors by allowing depreciation of rupee against dollar in frequent manner and so far the rupee has nosedived from Rs152 to Rs167.13 against dollar in the last four months.