ISLAMABAD: Pakistan’s trade deficit widened nearly 30 per cent in the first quarter of the current fiscal year, the Pakistan Bureau of Statistics said on Wednesday.
It rose to $9.09 billion between July and September from $7bn over the previous year.
The trade deficit increased by 22pc year-on-year in September to $2.8bn.
The rising trade deficit poses one of the most serious challenges for the government in the current fiscal year.
Last fiscal year saw the trade deficit rise to an all-time high of $32.58bn, representing year-on-year growth of 37pc.
The country’s annual trade deficit was $20.44bn in 2013. It has been continuously on the rise since then.
The Economic Coordination Committee (ECC) of the cabinet has already approved a strategy suggesting the rationalistaion of tariffs and imposition of regulatory duties on all non-essential imports to curtail the flows of these items.
“We have identified a list of items under the free trade agreement (FTAs), which will be subject to regulatory duties,” an official source in the commerce ministry said. Some of the items were already subject to regulatory duties in the last budget.
According to the official, the regulatory duty rates will be increased further on the existing products as well. “The list will be finalised in consultation with the Federal Board of Revenue,” the official said, adding the list will be notified by the customs department after approval from Finance Minister Ishaq Dar.
Imports recorded a growth of 22pc to $14.26bn in July-September from $11.67bn a year ago. The import bill increased 16.7pc year-on-year to $4.47bn in September alone. The import bill is rising due to an increase in the arrival of capital goods, petroleum products and food products.
Exports continued to show a rebound that began early in 2017, recording a growth of 10.84pc in July-September. Export proceeds went up to $5.172bn from $4.67bn a year ago. On a monthly basis, exports increased 8.9pc year-on-year to $1.67bn.
Overall exports fell 1.63pc to $20.45bn in 2016-17. The Ministry of Commerce claimed that the changes in the prime minister’s package will boost exports. The package was already approved by the ECC, the official source said, adding it will be sent to the cabinet for subsequent approval.
After approval it will be notified by the commerce and textile divisions.
On the other hand, the Ministry of Commerce has also taken some administrative steps, such as providing facility for enhancing exports to African countries. “We are expecting that our administrative measures coupled with policy measures will boost exports in the range of $500 million,” the official said.
He said the ministry continues its advocacy for the timely disbursement of refunds as well as payments under the premier’s trade enhancement initiative. Moreover, the changes in the existing FTAs will also ensure more market access for Pakistani products, especially in China.
Published in Dawn, October 12th, 2017
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