Trade deficit widens to record $43.33 billion

By Staff Reporter

ISLAMABAD: Trade deficit has widened to a record $43.33 billion in July-May on high oil import bill, which may further worsen the current account balance and devalue the rupee.

Higher petroleum products, edible oil, and other commodities prices in the international market widened the trade balance. Growth in exports was, though, reasonably good during the year, but still, it has far less potential to reduce trade imbalances.

In the first 11 months of fiscal 2021/22, deficit widened to $15.88 billion or 57.85 percent compared to $27.45 billion the economy racked up in the same period a year ago.

Imports surged to a whopping $72.18 billion while exports were at $28.848 billion in July-May period. The imports were 60 percent more than exports, the Pakistan Bureau of Statistics (PBS) reported. In the same period last fiscal, imports were at $50 billion and exports at $22.576 billion. This depicts a 27.8 percent growth in exports and a 44.3 percent increase in imports.

Goods exports in May 2022 picked up 55.66 percent to $2.6 billion from $1.67 billion in the corresponding month a year ago, while imports rose by 25.4 percent to $6.64 billion from $5.297 billion in May 2021. The trade deficit in May 2022 swelled 11.5 percent to $4.04 billion from $3.63 billion in the same month a year ago.

Comparing trade performance with the previous month, goods exports in May 2022 were down 10.2 percent from $2.897 billion in April 2022. Imports during May 2022 were down by half a percent from $6.679 billion in April 2022.

Amid the country’s external financing imbalance, the rupee devaluation did not significantly help boost exports.

During the last fiscal (2020-21) trade deficit stood at $31.1 billion or 34.3 percent higher than the $23.159 billion recorded in FY2019-20. In FY2021, imports clocked in at $56.405 billion and exports $25.30 billion.

During FY2020, the exports hit $21.39 billion, while imports came in at $44.55 billion, a deficit of $23.159 billion.