Trade deficit swells over 162pc in November

This is the highest trade deficit recorded in a single month in terms of value

ISLAMABAD: The trade deficit has continued to increase for the fifth consecutive month of the current fiscal year bulging to over 162 per cent in November, the highest recorded in a single month in terms of value.

The reversing trend in trade deficit was witnessed for the fifth consecutive month as merchandise trade deficit reached $5.107 billion in November against $1.946 billion over the corresponding month last year, according to provisional data released on Wed­nesday.

The import bill has continuously been increasing since the government decided to open up imports for boosting economic activities after lockdowns and trade disruption due to the Covid-19 pandemic.

In October, the import bill had reached an all-time high of $8.01 billion from $4.12 billion over the corresponding month of FY21, indicating an increase of over 94pc.

However, officials of the Ministry of Commerce claimed that the import figures were yet to be finalised.

As per insiders, the State Bank of Pakistan (SBP) and Federal Board of Revenue (FBR) were concerned about early release of the trade figures by the Ministry of Commerce. The stockholders had suggested the ministry release only the figures by the first of every month while waiting for more details for a couple of days.

On Wednesday, Advisor on Commerce Razak Dawood while sharing data on exports from the country in November had also tweeted saying that data on imports is being analysed and will be shared ‘shortly’. 

the increase in import, however, has helped FBR collect maximum revenue including sales tax, withholding tax and customs duty.

Figures seen by Profit show that the first five months of the current fiscal year (5MFY22) posted a rise of more than 117.25pc in the trade deficit as overall merchandise trade deficit reached $20.746 billion in July-November FY22 from $9.549bn in 5MFY21.

The import bill in July-November FY22 rose by 71.59pc to $33.111bn against $19.296bn over the corresponding months of last year.

The trade gap has been widening since December last year, mainly led by exponential growth in imports and comparatively slow growth in exports.

According to the Ministry of Commerce, exports posted a growth year-on-year (YoY) of 27pc to $12.365bn in 5MFY22 against $9.747bn over the corresponding months of last year.

In November 2021, exports posted a growth of 33pc to $2.903bn against $2.174bn over the last year.

Advisor on Commerce Razak Dawood termed the growth in export proceeds in the month of November a historic one. He said the export target for the five months was $12.2bn. The monthly target for November was $2.6bn. Export proceeds went up 18.2pc to $25.294bn in FY21 from $21.394bn over the last year.

 

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Ghulam Abbas
The writer is a member of the staff at the Islamabad Bureau. He can be reached at [email protected]

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