Pakistan’s trade deficit reaches all time high in 11 months

As the governments fail to reduce imports the country’s trade deficit has reached an all time high in 11 months.

As per data released by Pakistan Bureau of Statistics (PBS) on Thursday, the trade deficit has widened by 57.85 percent during the first eleven months (July-May) of the current fiscal year, 2021-22. The deficit has reached $43.334 billion compared to $27.452 billion during the same period of 2020-21, which is considered the highest ever trade deficit for the period under review.

However, the data regarding monthly exports show the country’s exports increased by 27.78 percent as it reached $28.848 billion in the past 11 months as compared to $22.576 billion recorded during the same period of fiscal year 2020-21.

Similarly the imports have also increased by 44.28 percent during the first eleven months (July-May) of the current fiscal year and stood at $72.182 billion compared to $50.028 billion during the same period of the corresponding year.

As per the PBS data, the country’s trade deficit widened by 11.50 percent on a year-on-year basis, jumping from $3.626 billion in May 2021 to $4.043 billion in May 2022.

Imports registered an increase of 25.43 percent on a year-on-year basis and jumped from $5.297 billion in May 2021 to $6.644 billion in May 2022.

Further, exports registered 55.66 percent growth on a year-on-year basis and increased from $1.671 billion in May 2021 to $2.601 billion in May 2022.

The fresh data shows that the trade deficit widened by 6.90 percent on a month-on-month (MoM) basis from $3.782 billion in April 2022 to $4.043 billion in May 2022.

Imports decreased by 0.52 percent on a month-on-month basis and remained $6.644 billion in May 2022 compared to $6.679 billion in April 2022.

Exports registered negative growth on MoM basis and decreased from $2.897 billion in April 2022 to $2.601 billion in May 2022.

Meanwhile the PBS has extended the basket of selected items comprising 1,674 for construction of export indices and 3,311 items for import indices in rebasing trade statistics from 1990-91 to 2017-18. The current count was 632 and 1,124 for export and import indices respectively.

As per the PBS report “Methodology of Trade Indices Base Year 2017-2018”, released recently the Governing Council of Pakistan Bureau of Statistics in its 5th meeting in 2014 issued a policy directive to rebase the National Accounts after every ten years. As a result, the National Accounts base year was changed from 2005-06 to 2015-16, the trade statistics also changed its base year from 1990-91 to 2017- 18.

The data collection strategies and computational methodologies of trade indices introduced under the new base will improve the quality of trade statistics and will enhance the scope and effectiveness of policies by providing efficient statistics collected in line with international best practices.