Trade deficit shrinks as exports grow faster than imports

Pakistan’s trade deficit shrank to $6.2 billion in first two months of the current fiscal year as the pace of growth in exports beat the increase in imports, indicating government’s administrative measures have started yielding results.

The trade deficit for July-August was 1.3% lower than the deficit recorded in the same period of previous fiscal year, reported the Pakistan Bureau of Statistics (PBS) on Tuesday.

The deficit was $78 million less than the same period of previous year.

Exports in July-August FY19 increased 5.1% to $3.7 billion. In absolute terms, export receipts were $176 million higher than the same period of previous year.

Remittances also posted a healthy growth which will ease pressure on the country’s balance of payments. Cumulatively, in the first two months, overseas Pakistanis remitted $3.96 billion, a growth of 13.45% compared with $3.49 billion in the same period of the preceding year.

Imports were valued at $9.83 billion, which was only 1% or $98 million higher than the import bill in the corresponding period of previous fiscal year.

Since December 2017, the State Bank of Pakistan has let the rupee depreciate against the US dollar by around 14.9% to Rs123.93 to a dollar.