ISLAMABAD: The trade deficit plunged by 32 per cent in January compared to same month last year owing to a drop in import of furnace oil, luxury items of food and automobiles.
The trade deficit declined 9.6pc in the first seven months over same period last year, according to the official figures of the Pakistan Bureau of Statistics released on Monday.
Trade deficit has been at the heart of the economy’s difficulties in the external sector, hitting an all-time high of $37.6bn last year, and respite on this front has been long-awaited. The government wasted no time to tout the figures.
Adviser to Prime Minister on Commerce Abdul Razak Dawood held a press conference to claim credit for the decline in imports by imposing regulatory duties on imports of luxury items and automobiles. He said the government also slapped ban on import of furnace oil.
Decline of 32pc compared to same month last year
Meanwhile, exports showed sluggish growth of 3.97pc compared to the same month last year despite a massive devaluation of almost 33pc since then. Exports touched $2.04 billion in January 2019 compared to $1.96bn last year.
The seven-month export figures posted a paltry growth of 2.24pc to reach $13.23bn, from $12.94bn in corresponding period last year. The numbers show the government still has more ground to cover in order to fulfil its pledge to revive exports.
Dawood claims that the result of currency devaluation will be visible in the export trajectory and went on to say that exports will pick up momentum and imports will record further steep decline in the months ahead.
He said that increasing trend in exports was seen in food items, textiles and cements in 7MFY19. He said edible oil imports reached $3bn, which needs to be decreased further for maintaining balance of trade. The real impact of devaluation will be felt in the next five months in export proceeds, the adviser claimed.
On the market access issue, Secretary Commerce Younus Dagha said the government is seeking preferential market in Africa, Latin America and United States.
According to a statement issued by the Commerce Division, imports have started declining due to a number of policy interventions by the government such as import contraction measures like regulatory duties (RDs) on non-essential items, improved energy supply, import substitution drive, economic stabilisation and currency devaluation.
In January, imports declined by 16pc on products that are subject to RD and those of power generation equipment by $724 million.
Trade deficit shrunk by 9.66pc to $19.26bn in July-January 2018 as against $21.32bn in corresponding period last year. In January, the trade deficit dipped to $2.46bn, from $3.6bn in month last year.
The value of imported goods in the seven-month period was recorded at $32.49bn, down 5.17pc, from the import bill in corresponding months of last fiscal year, which was $34.26bn.
The decline in imports was steeper in January, falling by 19.14pc to $4.5bn as against $5.57bn over the corresponding month in 2018.
Published in Dawn, February 12th, 2019