August trade deficit shrinks 18.5pct m/m to $3.5bln

By Staff Reporter

ISLAMABAD: Trade deficit shrunk by 18.5 percent year-on-year to $3.5 billion in August, government data showed on Friday.

Imports fell an annual 8.26 percent last month year-on-year to $6.03 billion. Merchandise exports rose 11.6 percent on year to $2.5 billion, the data showed.

From July through August 2022, the trade deficit shrank 17.1 percent to $6.269 billion. Total export during the first two months of current fiscal year stood at $4.75 billion against $4.58 billion in the corresponding period last year, showing a growth of 3.71 percent. Imports during July-August 2022 surged to $11.3 billion. The imports were still 132 percent more than exports.

Latest data indicates that the import compression measures taken by the government are now gradually curtailing imports as per policy regime of the government.

The government, in May last banned imports of all non-essential luxury goods to avert a balance of payments crisis after the central bank reserves had fallen as low as $7.8 billion.

The country’s major imports including fuel, edible oil and pulses were exempted from the ban.

Last month the government lifted the ban, except for automobiles, cell phones and home appliances. But such items were heavily taxed. The government imposed a series of regulatory duties on a number of items to slow imports.

Analysts said the trade balance has also benefited from a fall in global oil prices which has eased pressure on the country’s — a net energy importer – hefty import bill.

In the last fiscal year, the trade deficit had surged to an all-time high of $48.66 billion, up from $30.96 billion a year ago, a significant 57 percent jump on the back of higher-than-expected imports.