Surging Imports: Trade deficit widens 55.29pc to $48.25bn

By Staff Reporter

ISLAMABAD: Trade deficit widened by a gargantuan 55.29 percent in the fiscal year ended on June 30, 2022 primarily powered by a surge in petroleum and foods imports that outpaced the exports by a mammoth margin.
The trade deficit jumped to $48.25 billion against $31.07 billion recorded in the fiscal year 2022-21, Pakistan Bureau of Statistics (PBS) reported on Monday.
In FY2022, exports grew by 25.51 percent to $31.76 billion compared to $25.30 billion in fiscal 2020-21.
Whereas imports posted almost 42 percent growth to $80.01 billion in the year under review against $56.38 dollar in the previous year.
In the month of June, the trade deficit grew 33 percent to $4.8 billion against $3.62 billion in June 2021 and 16.50 percent compared to $4.151 billion recorded in May 2022.
In June last fiscal, exports totaled $2.88 billion, up 5.83 percent against $2.72 billion in June FY2021 and 10 percent from $2.62 billion in May 2022.
The imports during the month of June 2022 surged 21.57 percent to $7.7 billion from $6.3 billion in the same month of 2021 and 14 percent from $6.77 billion registered in May 2022.
“The huge trade deficit in the last fiscal was mainly caused by the high import bill of petroleum and foods groups”, Tahir Abbas, Head of Research at Arif Habib Limited.
He said that prices of petroleum and food items went up massively in the international market, which pushed up the country’s import bill manifold.
Tahir said the huge trade deficit also negatively impacted the current account deficit, expected to hover around $16.5 billion for the last fiscal.
On the other hand, he pointed out that textile exports registered 26 percent growth to $19.4 billion in the last fiscal.
About the future trend of imports in the current fiscal and its impact on the trade deficit, Tahir anticipated that the trade deficit would see contraction after the government’s as well as State Bank of Pakistan’s actions to reduce imports.
He said that Covid vaccine imports would be low and as well as high prices of petroleum products in the domestic market would cut the consumption and help bring the imports down.